Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39850
Authors: 
Kolmar, Martin
Wagener, Andreas
Year of Publication: 
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

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