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Price taking equilibrium in economies with multiple memberships in clubs and unbounded club sizes

  • Allouch, Nizar
  • Wooders, Myrna

We model an economy with clubs (or jurisdictions) where individuals may belong to multiple clubs and where clubs sizes are arbitrary--clubs may be restricted to consist of only one or two persons, or as large as the entire economy, or anything in-between. Notions of price-taking equilibrium and the core, both with communication costs, are introduced. These notions take into account that there is a small communication cost of deviating from a given outcome. We demonstrate that, given communication costs, for all sufficiently large economies the core is nonempty and the set of price-taking equilibrium outcomes is equivalent to the core.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 140 (2008)
Issue (Month): 1 (May)
Pages: 246-278

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Handle: RePEc:eee:jetheo:v:140:y:2008:i:1:p:246-278
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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