A Human Relations Paradox

Hans Gersbach and Hans Haller ()
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Hans Haller: Virginia Polytechnic Institute

No 11/145, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: We present a variant of a general equilibrium model with group formation to study how changes of non-consumptive benefits from group formation impact on the well-being of group members. We identify a human relations paradox: Positive externalities increase, but none of the group members gains in equilibrium. Moreover, a member who experiences an increase of positive emotional benefits in a group may become worse off in equilibrium.

Keywords: Group formation; competitive markets; human relation; exit (search for similar items in EconPapers)
JEL-codes: D41 D50 D60 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2011-04
New Economics Papers: this item is included in nep-cdm, nep-hrm and nep-soc
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Journal Article: A human relations paradox (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:11-145

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