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Barcelona GSE Working Paper No. 737

Title: Meritocracy, Egalitarianism and the Stability of Majoritarian Organizations
Authors: Salvador Barberŕ, Carmen Beviá, Clara Ponsatí
Date: 24-02-2014
Keywords: egalitarianism, meritocracy, coalition formation, hedonic games, core stability, assortative mating
JEL Codes: C62, C71, D02, D71
Egalitarianism and meritocracy are competing principles to distribute the joint benefits of cooperation. We examine the consequences of letting members of society vote between those two principles, in a context where groups of a certain size must be formed in order for individuals to become productive. Our setup induces a hedonic game of coalition formation. We study the existence of core stable partitions (organizational structures) of this game. We show that the inability of voters to commit to one distributional rule or another is a potential source of instability. But we also prove that, when stable organizational structures exist, they may be rich in form, and different than those predicted by alternative models of group formation. Non- segregated groups may arise within core stable structures. Stability is also compatible with the coexistence of meritocratic and egalitarian groups. These phenomena are robust, and persist under alternative variants of our initial model.
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