This paper develops a positive analysis of stable group formation, highlighting the role of conflict management within groups. The analysis builds on a simple economic model that features a “winner-take-all†contest for control of some resource. When a group forms, members pool their...

This paper develops a positive analysis of stable group formation, highlighting the role of conflict management within groups. The analysis is based on a model of sequential conflict, starting with a "winner- take-all" contest for control of some resource. When a group forms, members pool their...