A Human Relations Paradox

We present a variant of a general equilibrium model with group formation to study how changes of non-consumptive beneï¬ts from group formation impact on the well-being of group members. We identify a human relations paradox: Positive externalities increase, but none of the group members gains in equilibrium. Moreover, a member who experiences an increase of positive emotional beneï¬ts in a group may become worse off in equilibrium.

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Year of publication:	2011
Authors:	Gersbach, Hans ; Haller, Hans
Institutions:	Department of Economics, Virginia Polytechnic Institute and State University (Virginia Tech)
Subject:	group formation \| competitive markets \| human relation \| exit

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	9 pages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009293747