Efficient club formation in a frictional environment

- We study the provision of club goods in a frictional environment.
- Clubs compete in a competing auctions game.
- The equilibrium is constrained efficient but the reserve price is generally not zero.

We study the assignment of agents to clubs in a frictional market environment. Club entry is endogenous and clubs compete by posting reserve prices in a competing auctions game prior to the agents' decisions regarding which club to visit. The competing auctions equilibrium is constrained efficient and the reserve price in general will not be zero.