English, Article edition: Monopolistic group design with peer effects Board, Simon

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Bookmark: http://trove.nla.gov.au/version/111579
Physical Description
  • article
Language
  • English

Edition details

Title
  • Monopolistic group design with peer effects
Author
  • Board, Simon
Physical Description
  • article
Notes
  • In a range of settings, private firms manage peer effects by sorting agents into different groups, be they schools, communities, or product categories. This paper considers such a firm, which controls group entry by setting a series of anonymous prices. We show that private provision systematically leads to two distortions relative to the efficient solution: first, agents are segregated too finely; second, too many agents are excluded from all groups. We demonstrate that these distortions are a consequence of anonymous pricing and do not depend upon the nature of the peer effects. This general approach also allows us to assess the way the `returns to scale' of peer technology and the cost of group formation affect the optimal group structure.
  • Mechanism design, peer effects, public goods, network effects
  • RePEc:the:publsh:413
Language
  • English
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