Spillovers from Voice and Exit

35 Pages Posted: 30 Jun 2017

See all articles by Adam G. Martin

Adam G. Martin

Texas Tech University - Free Market Institute

Date Written: June 29, 2017

Abstract

My use of voice or exit can have spillover effects on you. I argue that voice behaves in important respects like a positional good. Positional goods have value only relative to the goods that others possess. Acquiring positional goods imposes negative externalities on others who lose status. Voice grants a form of influence that is relative rather than absolute, and can give rise to a winner-take-all distribution of influence. The more effective your voice, the less effective mine. Exit, by contrast, has properties in common with a network good. A network good is valuable to the extent that other individuals possess the same good. Possession of the good thus generates positive externalities. Exit operates like a network good, generating direct and indirect spillovers that create benefits even for those who do not possess the capacity to exit.

Suggested Citation

Martin, Adam G., Spillovers from Voice and Exit (June 29, 2017). Available at SSRN: https://ssrn.com/abstract=2995184 or http://dx.doi.org/10.2139/ssrn.2995184

Adam G. Martin (Contact Author)

Texas Tech University - Free Market Institute ( email )

Box 45059
Lubbock, TX 79409-5059
United States

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