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Growing groups, cooperation, and the rate of entry


Ranehill, Eva; Schneider, Frédéric; Weber, Roberto A (2013). Growing groups, cooperation, and the rate of entry. Working paper series / Department of Economics 103, University of Zurich.

Abstract

We study the stability of voluntary cooperation in response to varying group growth rates. Using a laboratory public-good game, we construct a situation where increasing group size yields potential efficiency gains, but only with sustained cooperation. We then study the effect of exogenously varying growth rates on cooperation. Slow growth yields higher cooperation rates and welfare than fast growth, both for incumbents and entrants, which is consistent with optimistic self-reinforcing beliefs persisting under slower growth. Allowing incumbent group members to select growth rates also sustains high cooperation rates, but growth stalls at intermediate group sizes, leaving potential efficiency gains unrealized.

Abstract

We study the stability of voluntary cooperation in response to varying group growth rates. Using a laboratory public-good game, we construct a situation where increasing group size yields potential efficiency gains, but only with sustained cooperation. We then study the effect of exogenously varying growth rates on cooperation. Slow growth yields higher cooperation rates and welfare than fast growth, both for incumbents and entrants, which is consistent with optimistic self-reinforcing beliefs persisting under slower growth. Allowing incumbent group members to select growth rates also sustains high cooperation rates, but growth stalls at intermediate group sizes, leaving potential efficiency gains unrealized.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C92, C72
Uncontrolled Keywords:Voluntary cooperation, experiment, public good game
Language:English
Date:May 2013
Deposited On:21 Dec 2012 16:19
Last Modified:13 Aug 2017 20:58
Series Name:Working paper series / Department of Economics
Number of Pages:44
ISSN:1664-7041
Additional Information:Revised version
Official URL:http://www.econ.uzh.ch/static/wp/econwp103.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php

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