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Stable sets in economies with club goods

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  • Japneet Kaur

    (Indira Gandhi Institute of Development Research)

Abstract

In an economy with club goods, we introduce the concept of von Neumann-Morgensetern stable sets. Our main result provides a correspondence between stable sets of a club economy comprising a continuum of agents and finitely many types with those that form in the related finite economy. Along with the trade in private goods, agents in our economy can belong to multiple clubs. A club is characterised by the undertaking in which it is engaged and the external attributes of its members. Further, inspired by Harsanyi [10], we also bring in the notion of `sophisticated stability' and show an equivalence between `sophisticated stable sets' in the utility space with those that form in the allocation space.

Suggested Citation

  • Japneet Kaur, 2023. "Stable sets in economies with club goods," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2023-011, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2023-011
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    File URL: http://www.igidr.ac.in/pdf/publication/WP-2023-011.pdf
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    References listed on IDEAS

    as
    1. Sandler, Todd, 1984. "Club optimality : Further Clarifications," Economics Letters, Elsevier, vol. 14(1), pages 61-65.
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    3. Ellickson, Bryan & Grodal, Birgit & Scotchmer, Suzanne & Zame, William R., 2001. "Clubs and the Market: Large Finite Economies," Journal of Economic Theory, Elsevier, vol. 101(1), pages 40-77, November.
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    6. Einy, Ezra & Holzman, Ron & Monderer, Dov & Shitovitz, Benyamin, 1996. "Core and Stable Sets of Large Games Arising in Economics," Journal of Economic Theory, Elsevier, vol. 68(1), pages 200-211, January.
    7. Einy, Ezra & Shitovitz, Benyamin, 2003. "Symmetric von Neumann-Morgenstern stable sets in pure exchange economies," Games and Economic Behavior, Elsevier, vol. 43(1), pages 28-43, April.
    8. Maria Gabriella Graziano & Maria Romaniello, 2016. "Stable sets of allocations and the provision of public goods," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 62(1), pages 15-42, June.
    9. Todd Sandler & John Tschirhart, 1997. "Club theory: Thirty years later," Public Choice, Springer, vol. 93(3), pages 335-355, December.
    10. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
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    12. Bhowmik, Anuj & Kaur, Japneet, 2023. "Competitive equilibria and robust efficiency with club goods," Journal of Mathematical Economics, Elsevier, vol. 108(C).
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    More about this item

    Keywords

    Club goods; Stable sets of allocations; Stable sets of payoffs; Core; Sophisticated stability;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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