Stability and Segregation in Group Formation
This paper presents a model of group formation based on the assumption that individuals prefer to associate with people similar to them. It is shown that, in general, if the number of groups that can be formed is bounded, then a stable partition of the society into groups may not exist. A partition is defined as stable if none of the individuals would prefer be in a different group than the one he is in. However, if individuals’ characteristics are one-dimensional, then a stable partition always exists. We give sufficient conditions for stable partitions to be segregating (in the sense that, for example, low-characteristic individuals are in one group and high-characteristic ones are in another) and Pareto efficient. In addition, we propose a dynamic model of individual myopic behavior describing the evolution of group formation to an eventual stable, segregating, and Pareto efficient partition.
|Date of creation:||Apr 2000|
|Date of revision:|
|Publication status:||Published in Games and Economic Behavior, 2002, vol. 38, pp. 318-346.|
|Contact details of provider:|| Postal: Feldman Building - Givat Ram - 91904 Jerusalem|
Web page: http://www.ratio.huji.ac.il/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Igal Milchtaich, 1998. "Crowding games are sequentially solvable," International Journal of Game Theory, Springer;Game Theory Society, vol. 27(4), pages 501-509.
- Tayfun Sönmez & Suryapratim Banerjee & Hideo Konishi, 2001.
"Core in a simple coalition formation game,"
Social Choice and Welfare,
Springer;The Society for Social Choice and Welfare, vol. 18(1), pages 135-153.
- Bryan Ellickson & Birgit Grodal & Suzanne Scotchmer & William R. Zame, 1999.
"Clubs and the Market: Large Finite Economies,"
99-05, University of Copenhagen. Department of Economics.
- Ellickson, Bryan & Grodal, Birgit & Scotchmer, Suzanne & Zane, William R., 1997. "clubs and the Market: Large Finite Economies," Department of Economics, Working Paper Series qt10k1b44j, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Bryan Ellickson and Birgit Grodal, Suzanne Scotchmer, and William R.Zame., 1997. "Clubs and the Market: Large Finite Economies," Economics Working Papers 97-255, University of California at Berkeley.
- Bryan Ellickson & Birgit Grodal & Suzanne Scotchmer & William Zame, 1997. "Clubs and the Market: Large Finite Economies," UCLA Economics Working Papers 766, UCLA Department of Economics.
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
- Greenberg, J. & Weber, S., 1991.
"Stable Coalition Structures with Unidimensional Set of Alternatives,"
9133, Tilburg - Center for Economic Research.
- Greenberg Joseph & Weber Shlomo, 1993. "Stable Coalition Structures with a Unidimensional Set of Alternatives," Journal of Economic Theory, Elsevier, vol. 60(1), pages 62-82, June.
- Greenberg, J. & Weber, S., 1991. "Stable Coalition Structure with Unidimensional Set of Alternatives," Papers 91-11, York (Canada) - Department of Economics.
- Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
- Kaneko, Mamoru & Kimura, Toshiyuki, 1992. "Conventions, social prejudices and discrimination: A festival game with merrymakers," Games and Economic Behavior, Elsevier, vol. 4(4), pages 511-527, October.
- Konishi, Hideo & Le Breton, Michel & Weber, Shlomo, 1998. "Equilibrium in a Finite Local Public Goods Economy," Journal of Economic Theory, Elsevier, vol. 79(2), pages 224-244, April.
- Mamoru Kaneko & Myrna Holtz Wooders, 1982.
"Cores of Partitioning Games,"
Cowles Foundation Discussion Papers
620, Cowles Foundation for Research in Economics, Yale University.
- Le Breton, M. & Owen, G. & Weber, S., 1991.
"Strongly Balanced Cooperative Games,"
91a09, Universite Aix-Marseille III.
- Westhoff, Frank, 1977. "Existence of equilibria in economies with a local public good," Journal of Economic Theory, Elsevier, vol. 14(1), pages 84-112, February.
- Karni, Edi & Schmeidler, David, 1990. "Fixed Preferences and Changing Tastes," American Economic Review, American Economic Association, vol. 80(2), pages 262-67, May.
- Bryan Ellickson & Birgit Grodal & Suzanne Scotchmer & William R Zame, 2003.
"Clubs and the Market,"
Levine's Working Paper Archive
618897000000000754, David K. Levine.
- repec:adr:anecst:y:1997:i:45:p:09 is not listed on IDEAS
- Wooders, Myrna, 1980. "The Tiebout Hypothesis: Near Optimality in Local Public Good Economies," Econometrica, Econometric Society, vol. 48(6), pages 1467-85, September.
- Bewley, Truman F, 1981. "A Critique of Tiebout's Theory of Local Public Expenditures," Econometrica, Econometric Society, vol. 49(3), pages 713-40, May.
- Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
- Westhoff, Frank, 1979. "Policy inferences from community choice models: A caution," Journal of Urban Economics, Elsevier, vol. 6(4), pages 535-549, October.
- Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, vol. 14(1), pages 124-143, May.
When requesting a correction, please mention this item's handle: RePEc:huj:dispap:dp263. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tomer Siedner)
If references are entirely missing, you can add them using this form.