Premium
Endogenous Group Formation
Author(s) -
AHN T. K.,
ISAAC R. MARK,
SALMON TIMOTHY C.
Publication year - 2008
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/j.1467-9779.2008.00357.x
Subject(s) - public good , group (periodic table) , free entry , endogeny , economics , free riding , action (physics) , microeconomics , collective action , public goods game , chemistry , biochemistry , incentive , physics , organic chemistry , quantum mechanics , politics , political science , law
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.