The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • Suzanne Scotchmer
Reference work entry


The word ‘club’ has a deceptively frivolous connotation, as does the word ‘game’. But, like game theory, club theory has wide reach. By ‘club’ economists mean a small group of people sharing an activity, often in a context where they care about each other’s characteristics. Such activities may include production of goods and services (firms), production of education (schools, academic departments), sharing of private goods in small groups, and community life (churches, charity organizations). The formation of firms, choice of schools, and choice of games to play are all covered by club theory, as are social arrangements like marriage.


Bundling Capitalization Club theory Clubs Competitive equilibrium Congestion Consumption Education Expected utility Externalities Games Group formation Group type Land markets Local public goods Lotteries Moral hazard Multiple equilibria Public goods Schools as clubs 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Suzanne Scotchmer
    • 1
  1. 1.