In this paper we consider a model of group formation where group of individuals may have different feasible sets. We focus on two polar cases, increasing returns, when the set of feasible alternatives increases if a new member joins thegroup, and decreasing returns, when a new member has an...

Immigrants in economies with a dominant native language exhibit substantial heterogeneities in language acquisition of the majority language. We model partial equilibrium language acquisition as an equilibrium phenomenon. We consider an environment where heterogeneous agents from various...