Pricing Group Membership

Arbeitspapier

We consider a model where agents differ in their ‘types’ which determines their voluntary contribution towards a public good. We analyze what the equilibrium composition of groups are under centralized and centralized choice. We show that there exists a top-down sorting equilibrium i.e. an equilibrium where there exists a set of prices which leads to groups that can be ordered by level of types, with the first k types in the group with the highest price and so on. This exists both under decentralized and centralized choosing. We also analyze the model with endogenous group size and examine under what conditions is top-down sorting socially efficient. We illustrate when integration (i.e. mixing types so that each group's average type if the same) is socially better than top-down sorting. Finally, we show that top down sorting is efficient even when groups compete among themselves.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 8498

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Institutions: Design, Formation, Operations, and Impact ; Altruism; Philanthropy; Intergenerational Transfers ; Social Choice; Clubs; Committees; Associations ; Public Goods
• Thema: top down sorting ; group formation ; public good ; segregation ; integration

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bandyopadhyay, Siddhartha ; Cabrales, Antonio
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and Ifo Institute (CESifo)
• (wo): Munich
• (wann): 2020

Weitere Informationen

• Handle: http://hdl.handle.net/10419/223570
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ