Meritocracy, egalitarianism and the stability of majoritarian organizations

Egalitarianism and meritocracy are competing principles to distribute the joint bene…ts 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 di¤erent than those predicted by alternative models of group formation. Nonsegregated 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. Key words: Egalitarianism, Meritocracy, Coalition Formation, Hedonic Games, Core Stability, Assortative Mating. Journal of Economic Literature Classi…cation Number (s): C62, C71, D02, D71. We thank Francis Bloch, Amrita Dillon, Anke Gerber, Matt Jackson, Michel Le Breton, and Jan Zapal for very useful comments. We gratefully acknowledge support from the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2011-0075). Barberà and Beviá acknowledge support from grants "Consolidated Group-C" ECO200804756 and FEDER, and SGR2009-0419. Ponsatí acknowledges support from grants ECO2009-08820, ECO2012-37065, and 2009 SGR 1142.