A Tragedy Of The Clubs: Excess Entry in Exclusive Coalitions
We study how social norms and individual rationality in the process of coalition formation sustain a particular form of collective inefficiency, namely excessive entry in the joint production and exploitation of an excludable good. We term this phenomenon the `tragedy of the clubs'. We model club formation as a non-cooperative game of coalition formation and surplus division, and show that, contrary to common wisdom, the tragedy of the clubs is a pervasive equilibrium phenomenon.
|Date of creation:||07 Aug 1998|
|Note:||Type of Document - .pdf and .ps versions available; prepared on IBM PC ; to print on HP/PostScript; pages: 38 ; figures: included|
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