When Inefficiency Begets Efficiency
Collective consumption decisions taken by the members of a household may prove inefficient. The impact of such inefficient household decisions on market performance is investigated. At one extreme, market efficiency can occur even when household decisions are inefficient, namely when household inefficiencies are merely due to inefficient net trades with the market. At the other extreme, market efficiency is bound to fail, if household inefficiencies are solely caused by an inefficient distribution of a household's aggregate consumption to its individual members. This leads us to consider competitive forces as a disciplinary device for households. When households compete for both resources and members then household stability requires efficient or not too inefficient internal distribution.
|Date of creation:||Feb 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+45) 35 32 30 10
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
- Chiappori, P.A., 1989.
"Collective Labour Supply and Welfare,"
DELTA Working Papers
89-07, DELTA (Ecole normale supérieure).
- Hans Gersbach & Hans Haller, 2003.
"Competitive Markets, Collective Decisions and Group Formation,"
CESifo Working Paper Series
953, CESifo Group Munich.
- Hans Gersbach & Hans Haller, 2002. "Competitive Markets, Collective Decisions and Group Formation," Discussion Papers 02-11, University of Copenhagen. Department of Economics.
- Gersbach, Hans & Haller, Hans, 2001. "Collective Decisions and Competitive Markets," Review of Economic Studies, Wiley Blackwell, vol. 68(2), pages 347-68, April.
- Becker, Gary S., 1978. "The Economic Approach to Human Behavior," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226041124.
When requesting a correction, please mention this item's handle: RePEc:kud:kuiedp:0311. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann)
If references are entirely missing, you can add them using this form.