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Title:The fear of exclusion: Individual effort when group formation is endogenous PDF Logo
Authors:Brekke, Kjell Arne
Nyborg, Karine
Rege, Mari
Issue Date:2005
Series/Report no.:Memorandum, Department of Economics, University of Oslo 2005,09
Abstract:To secure their membership in a popular group, individuals may contribute more to the group’s local public good than they would if group formation were exogenous. Those in the most unpopular group do not have this incentive to contribute to their group. Substantial differences in individual efforts levels between groups may be the result. A principal may prefer either exogenous or endogenous group formation, depending on whether an increase in contributions to the local public good coincides with the principal’s interests. We analyze two examples: Social interaction in schools, and multiple-task teamwork.
Subjects:Local public goods
opportunity costs
popularity
multiple-task principalagent analysis
JEL:C72
D11
D23
L24
Z13
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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