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A “Tragedy of the Clubs”: Excess Entry in Exclusive Coalitions
Author(s) -
Manzini Paola,
Mariotti Marco
Publication year - 2002
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/1467-9779.00091
Subject(s) - excludability , inefficiency , economics , phenomenon , tragedy (event) , club , production (economics) , rationality , microeconomics , tragedy of the commons , law , sociology , public good , biology , ecology , commons , social science , physics , quantum mechanics , political science , anatomy
We model club formation as a noncooperative game of coalition formation and surplus division. We show how social norms and individual rationality sustain a particular type 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.” The tragedy of the clubs is a pervasive equilibrium phenomenon.