Consumption Externalities, Rental Markets and Purchase Clubs
A 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.
|Date of creation:||Jan 2002|
|Date of revision:||May 2003|
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- Bakos, Yannis & Brynjolfsson, Erik & Lichtman, Douglas, 1999. "Shared Information Goods," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 117-155, April.
- Yannis Bakos & Erik Brynjolfsson, 1999.
"Bundling Information Goods: Pricing, Profits, and Efficiency,"
INFORMS, vol. 45(12), pages 1613-1630, December.
- Yannis Bakos & Erik Brynjolfsson, 1997. "Bundling Information Goods: Pricing, Profits and Efficiency," Working Paper Series 199, MIT Center for Coordination Science.
- Hans Gersbach & Hans Haller, 2001. "Collective Decisions and Competitive Markets," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 347-368.