IDEAS home Printed from https://ideas.repec.org/p/tiu/tiucen/bb64b10a-d41b-490d-9beb-a2de2de6cd8f.html
   My bibliography  Save this paper

How does Clubs' Organizational Design Affect Competition Among Clubs?

Author

Listed:
  • Prüfer, J.

    (Tilburg University, Center For Economic Research)

  • Walz, U.

Abstract

We analyze competition among clubs in which the status of club members is the crucial added value accruing to fellow club members through social interaction within the club (e.g. in country clubs, academic faculties, or internet communities). In the course of competition for new members, clubs trade off the effect of entry on average status of the club and candidates’ monetary payment via an entrance fee. We show that the best candidates join the best clubs but they pay higher entrance fees than some lowerranking candidates. We distinguish among various decision rules and organizational set-ups, including majority voting, unanimity, and meritocracy. We find that, from a second-best welfare perspective, the unanimity rule leads to inefficient exclusion of some candidates, while meritocracy leads to inefficient inclusion. Our main policy implication is that consensus-based clubs, such as many academic faculties in Europe, could improve the well-being of their members if they liberalized their internal decision making processes.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another versi
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Prüfer, J. & Walz, U., 2007. "How does Clubs' Organizational Design Affect Competition Among Clubs?," Discussion Paper 2007-27, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:bb64b10a-d41b-490d-9beb-a2de2de6cd8f
    as

    Download full text from publisher

    File URL: https://pure.uvt.nl/ws/portalfiles/portal/825423/dp2007-27.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:hrv:faseco:4553034 is not listed on IDEAS
    2. Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 645-681, August.
    3. Justin Pappas Johnson, 2002. "Open Source Software: Private Provision of a Public Good," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(4), pages 637-662, December.
    4. Dennis Epple & Richard Romano, 2008. "Educational Vouchers And Cream Skimming," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
    5. Sandler, Todd & Tschirhart, John T, 1980. "The Economic Theory of Clubs: An Evaluative Survey," Journal of Economic Literature, American Economic Association, vol. 18(4), pages 1481-1521, December.
    6. Hansmann, Henry, 1986. "A Theory of Status Organizations," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 2(1), pages 119-130, Spring.
    7. Patrick Bolton & Gérard Roland, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1057-1090.
    8. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-858, August.
    9. Roland Bénabou, 1996. "Equity and Efficiency in Human Capital Investment: The Local Connection," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(2), pages 237-264.
    10. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2004. "Political Jurisdictions in Heterogeneous Communities," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 348-396, April.
    11. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    12. Robert W. Helsley & William C. Strange, 1991. "Exclusion and the Theory of Clubs," Canadian Journal of Economics, Canadian Economics Association, vol. 24(4), pages 889-899, November.
    13. Casella, Alessandra & Frey, Bruno, 1992. "Federalism and clubs : Towards an economic theory of overlapping political jurisdictions," European Economic Review, Elsevier, vol. 36(2-3), pages 639-646, April.
    14. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, October.
    15. Wellisch,Dietmar, 2000. "Theory of Public Finance in a Federal State," Cambridge Books, Cambridge University Press, number 9780521630351, October.
    16. Alesina, Alberto & Spolaore, Enrico & Wacziarg, Romain, 2005. "Trade, Growth and the Size of Countries," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 23, pages 1499-1542, Elsevier.
    17. Basu, Kaushik, 1989. "A Theory of Association: Social Status, Prices and Markets," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 653-671, October.
    18. Alessandra Casella, 2001. "The Role of Market Size in the Formation of Jurisdictions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(1), pages 83-108.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prüfer, J. & Walz, U., 2009. "How Does the Governance of Academic Faculties Affect Competition Among Them?," Other publications TiSEM f0e504a7-78a7-4315-8517-e, Tilburg University, School of Economics and Management.
    2. Jens Prüfer & Uwe Walz, 2013. "Academic faculty governance and recruitment decisions," Public Choice, Springer, vol. 155(3), pages 507-529, June.
    3. Dokow, Elad & Luque, Jaime, 2019. "Provision of local public goods in mixed income communities," Journal of Housing Economics, Elsevier, vol. 45(C), pages 1-1.
    4. Christopher Avery & Parag A. Pathak, 2021. "The Distributional Consequences of Public School Choice," American Economic Review, American Economic Association, vol. 111(1), pages 129-152, January.
    5. Patrick Bayer & Stephen L. Ross, 2006. "Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application," Working papers 2006-13, University of Connecticut, Department of Economics, revised Jan 2009.
    6. Dennis Epple, 2003. "Modeling Population Statification Across Locations: An Overview," International Regional Science Review, , vol. 26(2), pages 189-196, April.
    7. Sigrid Roehrs & David Stadelmann, 2010. "Mobility and local income redistribution," Working Papers 2010/4, Institut d'Economia de Barcelona (IEB).
    8. Dennis N. Epple & Richard Romano, 2003. "Neighborhood Schools, Choice, and the Distribution of Educational Benefits," NBER Chapters, in: The Economics of School Choice, pages 227-286, National Bureau of Economic Research, Inc.
    9. Yannis M. Ioannides, 2010. "Neighborhood Effects and Housing," Discussion Papers Series, Department of Economics, Tufts University 0747, Department of Economics, Tufts University.
    10. Gilat Levy & Ronny Razin, 2017. "The Coevolution of Segregation, Polarized Beliefs, and Discrimination: The Case of Private versus State Education," American Economic Journal: Microeconomics, American Economic Association, vol. 9(4), pages 141-170, November.
    11. Stephen M. Calabrese & Dennis N. Epple & Richard E. Romano, 2012. "Inefficiencies from Metropolitan Political and Fiscal Decentralization: Failures of Tiebout Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(3), pages 1081-1111.
    12. Paololo Melindi Ghidi, 2012. "Income Inequality, School Choice and the Endogenous Gentrification of US Cities," LIDAM Discussion Papers IRES 2012006, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    13. Trent J. MacDonald, 2019. "The Political Economy of Non-Territorial Exit," Books, Edward Elgar Publishing, number 18871.
    14. Jaramillo, Fernando & Kempf, Hubert & Moizeau, Fabien, 2003. "Inequality and club formation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 931-955, May.
    15. Brandi, Clara & Wohlgemuth, Michael, 2006. "Strategies of Flexible Integration and Enlargement of the European Union: a Club-theoretical and Constitutional Economics Perspective," Freiburg Discussion Papers on Constitutional Economics 06/7, Walter Eucken Institut e.V..
    16. Nechyba, Thomas, 2003. "School finance, spatial income segregation, and the nature of communities," Journal of Urban Economics, Elsevier, vol. 54(1), pages 61-88, July.
    17. Dennis Epple & Brett Gordon & Holger Sieg, 2010. "Drs. Muth And Mills Meet Dr. Tiebout: Integrating Location‐Specific Amenities Into Multi‐Community Equilibrium Models," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 381-400, February.
    18. Fernández, Raquel, 2001. "Sorting, Education and Inequality," CEPR Discussion Papers 3020, C.E.P.R. Discussion Papers.
    19. Hyytinen, Ari & Saarimaa, Tuukka & Tukiainen, Janne, 2014. "Electoral vulnerability and size of local governments: Evidence from voting on municipal mergers," Journal of Public Economics, Elsevier, vol. 120(C), pages 193-204.
    20. Patrick Bayer & Robert McMillan & Alvin Murphy & Christopher Timmins, 2016. "A Dynamic Model of Demand for Houses and Neighborhoods," Econometrica, Econometric Society, vol. 84, pages 893-942, May.

    More about this item

    Keywords

    club theory; status organizations; design of decision making; collective action;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tiu:tiucen:bb64b10a-d41b-490d-9beb-a2de2de6cd8f. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Richard Broekman (email available below). General contact details of provider: http://center.uvt.nl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.