We consider the formation and long-run stability of cooperative groups in a social dilemma situation where the pursuit of individual interests conicts with the maximization of social welfare. The adaptive play model of Young (1993) is applied to a group formation game where voluntary...

We present a simple model of voluntary groups in a collective action problem where individuals differ in their willingness to cooperate. The heterogeneity of individuals' preferences generally yields multiple equilibrium groups with different levels of cooperation. Voluntary participation in a...

The second-order dilemma of public goods arises from individuals' incentive to free ride on a mechanism to solve the provision problem (first-order dilemma) of public goods. Without relying on social and behavioral arguments, we show by a voluntary participation game that the accumulation of...

We consider how public goods can be provided and accumulated over generations of self-interested individuals in the absence of a government authority. A dynamic voluntary participation game is presented to analyze interrelations among group formation, accumulation and population change. We show...