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Clubs and the Market: Continuum Economies

Author

Listed:
  • Bryan Ellickson

    (Department of Economics, UCLA)

  • Birgit Grodal

    (Institute of Economics, University of Copenhagen)

  • Suzanne Scotchmer

    (Department of Economics University of California, Berkeley)

  • William R. Zame

    (Department of Economics, UCLA)

Abstract

This paper defines a general equilibrium model with exchange and club formation. Agents trade multiple private goods widely in the market, can belong to several clubs, and care about the characteristics of the other members of their clubs. The space of agents is a continuum, but clubs are finite. It is shown that (i) competitive equilibria exist, and (ii) the core coincides with the set of equilibrium states. The central subtlety is in modeling club memberships and expressing the notion that membership choices are consistent across the population.

Suggested Citation

  • Bryan Ellickson & Birgit Grodal & Suzanne Scotchmer & William R. Zame, 1998. "Clubs and the Market: Continuum Economies," Microeconomics 9802002, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpmi:9802002
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    References listed on IDEAS

    as
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    Cited by:

    1. 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.
    2. Harold L. Cole & George J. Mailath & Andrew Postlewaite, "undated". "Efficient Non-Contractible Investments," Penn CARESS Working Papers 08d6793d32cab8f6e1f46dac0, Penn Economics Department.
    3. John P. Conley & Myrna Holtz Wooders, 1998. "The Tiebout Hypothesis: On the Existence of Pareto Efficient Competitive Equilibrium," Working Papers mwooders-98-06, University of Toronto, Department of Economics.

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    More about this item

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • H4 - Public Economics - - Publicly Provided Goods

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