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A human relations paradox

Hans Gersbach and Hans Haller

Mathematical Social Sciences, 2013, vol. 65, issue 2, 154-156

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.

Date: 2013
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Working Paper: A Human Relations Paradox (2011) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:65:y:2013:i:2:p:154-156

DOI: 10.1016/j.mathsocsci.2012.08.004

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