How Does Clubs' Organizational Design Affect Competition Among Clubs?

J. Prüfer, U. Walz

Research output: Working paperDiscussion paperOther research output

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Abstract

We analyze competition among clubs in which the status of club members is the crucial added value accruing to fellow club members through social interaction within the club (e.g. in country clubs, academic faculties, or internet communities). In the course of competition for new members, clubs trade off the effect of entry on average status of the club and candidates’ monetary payment via an entrance fee. We show that the best candidates join the best clubs but they pay higher entrance fees than some lowerranking candidates. We distinguish among various decision rules and organizational set-ups, including majority voting, unanimity, and meritocracy. We find that, from a second-best welfare perspective, the unanimity rule leads to inefficient exclusion of some candidates, while meritocracy leads to inefficient inclusion. Our main policy implication is that consensus-based clubs, such as many academic faculties in Europe, could improve the well-being of their members if they liberalized their internal decision making processes.
Original languageEnglish
Place of PublicationTilburg
PublisherTILEC
Number of pages29
Volume2007-011
Publication statusPublished - 2007

Publication series

NameTILEC Discussion Paper
Volume2007-011

Fingerprint

Organizational design
Clubs
Meritocracy
Unanimity
Fees
Inclusion
Payment
World Wide Web
Trade-offs
Well-being
Exclusion
Decision-making process
Added value
Join
Decision rules
Policy implications
Majority voting
Social interaction

Keywords

  • club theory
  • status organizations
  • design of decision making
  • collective action

Cite this

Prüfer, J., & Walz, U. (2007). How Does Clubs' Organizational Design Affect Competition Among Clubs? (TILEC Discussion Paper; Vol. 2007-011). Tilburg: TILEC.
Prüfer, J. ; Walz, U. / How Does Clubs' Organizational Design Affect Competition Among Clubs?. Tilburg : TILEC, 2007. (TILEC Discussion Paper).
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Prüfer, J & Walz, U 2007 'How Does Clubs' Organizational Design Affect Competition Among Clubs?' TILEC Discussion Paper, vol. 2007-011, TILEC, Tilburg.

How Does Clubs' Organizational Design Affect Competition Among Clubs? / Prüfer, J.; Walz, U.

Tilburg : TILEC, 2007. (TILEC Discussion Paper; Vol. 2007-011).

Research output: Working paperDiscussion paperOther research output

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Prüfer J, Walz U. How Does Clubs' Organizational Design Affect Competition Among Clubs? Tilburg: TILEC. 2007. (TILEC Discussion Paper).