Pricing group membership

We consider a model where agents differ in their ‘types’ which determines contribution towards club good (i.e public within group). analyze what the equilibrium composition of groups are under mandated and voluntary choice. show that there exists top-down sorting i.e. an set prices leads to can be ordered by sets types, with highest types group paying price so on. This both choosing. also endogenous size examine conditions is socially efficient. illustrate when integration (i.e. mixing each group’s average type same) better than sorting.