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 barter, through co-ownership, or simply because one person’s consumption affects another person’s wellbeing. We 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. Our main applications are to rental markets and “purchase clubs” in which members share the goods that they have individually purchased.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 03-25.
Length: 33 pages
Date of creation: Jan 2002
Date of revision: May 2003
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Other versions of this item:
- Suzanne Scotchmer, 2005. "Consumption externalities, rental markets and purchase clubs," Economic Theory, Springer, vol. 25(1), pages 235-253, 01.
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