MUTUAL ADMIRATION CLUBS

"This article proposes a theory of group formation based on the motive to seek informed opinion. Because an individual evaluates whether others are informed or not using his own priors, he identifies people with similar beliefs to be more informed than those with different beliefs. The result is an equilibrium in which like-minded individuals self-select into distinct groups, with members of each group believing that their own group is superior." ("JEL" D71, D81, D83, D85) Copyright (c) 2009 Western Economic Association International.