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Sharing among Clubs: A Club of Clubs Theory

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  • Sterbenz, Frederic P
  • Sandler, Todd

Abstract

This article investigates interclub sharing arrangements as a means for coping with random utilization without imposing capacity constraints that require members to be turned away. The optimal sharing rule and toll are identified for a two-club sharing scheme. When optimal sharing is invoked, the Pareto-optimal provision and membership size are determined for the two clubs and then contrasted with the Nash equilibrium, characterized by interclub easy riding. The use of a nonzero toll is shown to curtail easy riding but at the expense of too little sharing. An institutional arrangement, in which the club rather than the members pays the sharing toll, is shown to cause less distortion. Copyright 1992 by Royal Economic Society.

Suggested Citation

  • Sterbenz, Frederic P & Sandler, Todd, 1992. "Sharing among Clubs: A Club of Clubs Theory," Oxford Economic Papers, Oxford University Press, vol. 44(1), pages 1-19, January.
    • Handle: RePEc:oup:oxecpp:v:44:y:1992:i:1:p:1-19
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    Citations

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    Cited by:

    1. Konrad, Kai A. & Rees, Ray, 2020. "Passports for sale: The political economy of conflict and cooperation in a meta-club," European Journal of Political Economy, Elsevier, vol. 62(C).
    2. Kevin Siqueira, 2001. "Clubs, Advertising, and Cost Sharing," Public Finance Review, , vol. 29(1), pages 83-95, January.
    3. repec:kap:iaecre:v:15:y:2009:i:3:p:278-295 is not listed on IDEAS
    4. Attiat Ott & Oswaldo Patino, 2009. "Is Economic Integration the Solution to African Development?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 15(3), pages 278-295, August.
    5. Coglan, Louisa & Pascoe, Sean, 2015. "Corporate-cooperative management of fisheries: A potential alternative governance structure for low value small fisheries?," Marine Policy, Elsevier, vol. 57(C), pages 27-35.
    6. Anuj Bhowmik & Japneet Kaur, 2022. "Competitive equilibria and robust efficiency with club goods," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2022-014, Indira Gandhi Institute of Development Research, Mumbai, India.
    7. Michael D. Smith & Rahul Telang, 2004. "Incentives and Protocols for Self-Organizing Interest-Based Peer-to-Peer Networks," Working Papers 04-12, NET Institute, revised Oct 2004.
    8. Siqueira, Kevin Jay, 1998. "Issues of collective action: common agency, partial cooperation, and clubs," ISU General Staff Papers 1998010108000013526, Iowa State University, Department of Economics.
    9. Bhowmik, Anuj & Kaur, Japneet, 2023. "Competitive equilibria and robust efficiency with club goods," Journal of Mathematical Economics, Elsevier, vol. 108(C).

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