The Number of Organizations in Heterogeneous Societies

Jo Lind

No 08/2010, Memorandum from Oslo University, Department of Economics

Abstract: I consider a society with heterogeneous individuals who can form organizations for the production of a differentiated service. An arrangement of organizations is said to be split up stable when there is no majority to split any of the organizations. Unlike other equilibrium concepts in the literature, the largest number of organizations that is split up stable corresponds to the socially optimal number of organizations, with a possibility of over provision of one organization. The analysis is extended to a case with endogeneous membership, where it is shown that the results remain the same.

Keywords: Organizations; public goods; split up stability; efficiency; endogneous membership (search for similar items in EconPapers)
JEL-codes: D71 D73 H49 L31 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2010-05-27
New Economics Papers: this item is included in nep-gth
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