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Endogenous Group Formation

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  • T. K. AHN
  • R. MARK ISAAC
  • TIMOTHY C. SALMON

Abstract

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.

Suggested Citation

  • T. K. Ahn & R. Mark Isaac & Timothy C. Salmon, 2008. "Endogenous Group Formation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(2), pages 171-194, April.
    • Handle: RePEc:bla:jpbect:v:10:y:2008:i:2:p:171-194
    DOI: 10.1111/j.1467-9779.2008.00357.x
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    References listed on IDEAS

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