Endogenous Group Formation

While the rules governing the formation of groups engaging in collective action may have significant impact on group size and behavior of members, most experiments on public goods have been conducted with the subjects in exogenously fixed groups or of fixed sizes. We study endogenous formation of gr...

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Bibliographic Details
Published in:Journal of public economic theory 2008-04, Vol.10 (2), p.171-194
Main Authors: AHN, T. K., ISAAC, R. MARK, SALMON, TIMOTHY C.
Format: Article
Language:English
Subjects:
Collective action
Economic theory
Market entry
Market exit
Studies
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Summary:While the rules governing the formation of groups engaging in collective action may have significant impact on group size and behavior of members, most experiments on public goods have been conducted with the subjects in exogenously fixed groups or of fixed sizes. We study endogenous formation of groups in a public‐goods provision game by allowing subjects to change groups under three sets of rules: free entry/exit, restricted entry with free exit, and free entry with restricted exit. We find that the rules governing entry and exit do have a significant impact on individual behavior and group‐level outcomes.
ISSN:1097-3923
1467-9779
DOI:10.1111/j.1467-9779.2008.00357.x