Technological Determinants of the Group-Size Paradox

39 Pages Posted: 28 Feb 2011 Last revised: 23 May 2011

See all articles by Martin Kolmar

Martin Kolmar

University of St. Gallen - Institute of Economy and the Environment (IWOe-HSG); CESifo (Center for Economic Studies and Ifo Institute)

Hendrik Rommeswinkel

National Taiwan University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 20, 2011

Abstract

The present paper analyzes the occurrence of the group-size paradox in situations in which groups compete for rents, allowing for degrees of rivalness of the rent among group members. We provide two intuitive criteria which for groups with homogenous valuations of the rent determine whether there are advantages or disadvantages for larger groups: group-size biasedness and returns to scale. For groups with heterogenous valuations, the complementarity of group members' efforts is shown to play a role as a further factor.

Keywords: Contests, Public Goods, Group-Size Paradox

JEL Classification: D74, H41

Suggested Citation

Kolmar, Martin and Rommeswinkel, Hendrik, Technological Determinants of the Group-Size Paradox (May 20, 2011). U. of St. Gallen Law & Economics Working Paper No. 2011-01, Available at SSRN: https://ssrn.com/abstract=1769768 or http://dx.doi.org/10.2139/ssrn.1769768

Martin Kolmar (Contact Author)

University of St. Gallen - Institute of Economy and the Environment (IWOe-HSG) ( email )

Varnbüelstrasse 14
CH-9000 St. Gallen
Switzerland
+41 (0)71 224 25 35 (Phone)
+41 (0)71 224 23 02 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

Hendrik Rommeswinkel

National Taiwan University - Department of Economics ( email )

21 Hsiu Chow Rd
Taipei, 10020
Taiwan

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