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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
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http://hdl.handle.net/10419/39850
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| Title: | | Inefficient group organization as optimal adaption to dominant environments  |
| Authors: | | Kolmar, Martin Wagener, Andreas |
| Issue Date: | | 2010 |
| Series/Report no.: | | CESifo working paper Public Choice 3157 |
| Abstract: | | Contests between groups are plagued by intra-group externalities (freeriding). Yet, costless incentive schemes that entirely avoid free-riding within a group might not be desirable, neither individually nor socially. In contests among two groups, a relatively weak (i.e., small or unproductive) group will optimally not implement them because they compound strength differences between groups. If both groups rein in their intra-group externalities, they are both worse off, compared to a situation with free-riding, if they are relatively similar. If they are sufficiently heterogenous, the weak group loses at the expense of the relatively strong group. |
| Subjects: | | conflict incentives group-size paradox |
| JEL: | | Z13 D72 N40 D74 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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