Consumption externalities, rental markets and purchase clubs
AbstractA premise of general equilibrium theory is that private goods are rival. Nevertheless, many private goods are shared, e.g., through borrowing, through co-ownership, or simply because one person’s consumption affects another person’s wellbeing. I analyze consumption externalities from the perspective of club theory, and argue that, provided consumption externalities are limited in scope, they can be internalized through membership fees to groups. Two important applications are to rental markets and “purchase clubs,” in which members share the goods that they have individually purchased. Copyright Springer-Verlag Berlin/Heidelberg 2005
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 25 (2005)
Issue (Month): 1 (01)
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Other versions of this item:
- Suzanne Scotchmer, 2002. "Consumption Externalities, Rental Markets and Purchase Clubs," Discussion Papers 03-25, University of Copenhagen. Department of Economics, revised May 2003.
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