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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Zulehner, Christine / Schirle, Tammy

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Membership Diversity in Club Decisions

Gary Biglaiser1 / James Friedman2

1University of North Carolina,

2University of North Carolina,

Citation Information: Topics in Economic Analysis & Policy. Volume 4, Issue 1, ISSN (Online) 1538-0653, DOI: 10.2202/1538-0653.1188, March 2004

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We examine a club model in which the club's policies are controlled by a homogeneous group of insiders. Their policy decision is to determine the number they will admit from two outsider groups. Countries have immigration policies, private clubs have membership policies, and professional practices also have membership criteria in which individuals may be screened. In all these organizations new members bring a material benefit to the organization, but do so at the cost of introducing a socially differentiated population of outsiders that the majority typically dislikes. It is the interplay of the material benefit and the social cost on which we focus. We characterize steady state equilibria and examine comparative statics results.

Keywords: clubs; immigration

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