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The Optimal Size for a Minority

  • Rapoport, Hillel


    (Paris School of Economics)

  • Weiss, Avi


    (Bar-Ilan University)

We investigate a setting in which members of a population, bifurcated into a majority and a minority, transact with randomly matched partners. All members are uniformly altruistic, and each transaction can be carried out cooperatively or through a market mechanism, with cooperative transactions saving on transaction costs. Externalities are introduced, whereby cooperation by members of one group and the relative size of that group, affect the incentives to cooperate by members of the other group. Under these conditions, we determine the optimal size of the minority from the minority’s perspective, and consider the conditions under which such a size might be attained. The model provides insights on social conflicts both between groups and within groups.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 284.

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Length: 40 pages
Date of creation: Apr 2001
Date of revision:
Publication status: published in: Journal of Economic Behavior and Organization, 2003, 52 (1), 27-45
Handle: RePEc:iza:izadps:dp284
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  1. George J. Borjas, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring.
  2. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
  3. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
  4. Iannaccone, Laurence R, 1992. "Sacrifice and Stigma: Reducing Free-Riding in Cults, Communes, and Other Collectives," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 271-91, April.
  5. Ben-Ner, Avner & Putterman, Louis, 2000. "On some implications of evolutionary psychology for the study of preferences and institutions," Journal of Economic Behavior & Organization, Elsevier, vol. 43(1), pages 91-99, September.
  6. R. Mark Isaac & James M. Walker, 1988. "Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 179-199.
  7. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
  8. Joel M. Guttman & Shmuel Nitzan & Uriel Spiegel, 1992. "Rent Seeking And Social Investment In Taste Change," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 31-42, 03.
  9. van Dijk, Frans & van Winden, Frans, 1997. "Dynamics of social ties and local public good provision," Journal of Public Economics, Elsevier, vol. 64(3), pages 323-341, June.
  10. repec:oup:qjecon:v:103:y:1988:i:1:p:179-99 is not listed on IDEAS
  11. repec:oup:qjecon:v:115:y:2000:i:3:p:905-953 is not listed on IDEAS
  12. repec:oup:qjecon:v:115:y:2000:i:3:p:715-753 is not listed on IDEAS
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