A Human Relations Paradox

We present a variant of a general equilibrium model with group formation to study how changes of non-consumptive benefits 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 benefits in a group may become worse off in equilibrium.

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Year of publication:	2011
Authors:	Gersbach, Hans ; Haller, Hans
Publisher:	Zurich : ETH Zurich, CER-ETH - Center of Economic Research
Subject:	Soziale Beziehungen \| Gruppenentscheidung \| Mitgliedschaft \| Wohlfahrtsanalyse \| Allgemeines Gleichgewicht \| Vollkommener Wettbewerb \| Wohlfahrtsökonomik \| Group formation \| competitive markets \| human relation \| exit

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Series:	Economics Working Paper Series ; 11/145
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.3929/ethz-a-006435852 [DOI] 665351623 [GVK] hdl:10419/171588 [Handle] RePEc:eth:wpswif:11-145 [RePEc]
Classification:	D41 - Perfect Competition ; D50 - General Equilibrium and Disequilibrium. General ; D60 - Welfare Economics. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10011753209