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A "Tragedy of the Clubs": Excess Entry in Exclusive Coalitions

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Working paper
Author/s: 
Paola Manzini and Marco Mariotti
Issue number: 
1999.058
Publisher: 
FEEM
Year: 
1999
We model club formation as a non-cooperative game of coalition formation and surplus division. We show how social norms and individual rationality sustain a particular form of collective inefficiency, namely entry in the joint production and exploration of an excludable good. We term this phenomenon the “tragedy of the clubs”. The tragedy of the clubs is a pervasive equilibrium phenomenon.
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