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The Core of Economies with Collective Goods and a Social Division of Labor

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This paper considers the Core of a competitive market economy with private commodities as well as (non-Samuelsonian) collective goods that are provided through an endogenous social division of labour. Our approach is founded on the hypothesis that every agent is a “consumer-producer”, producing private commodities as well as consuming collective and private goods. We develop the s-core concept, assuming that collective goods are scalable with community size. We show that the s-core can be founded on deviations of coalitions of arbitrary size, extending the seminal insights of Vind and Schmeidler for pure exchange economies. Our analysis also shows that self-organisation in a social division of labour can be incorporated into the Edgeworthian barter process directly. This is formulated as an equivalence of the s-core and a structured s-core concept based on blocking coalitions that use internal divisions of labour. Furthermore, Grodal’s theorem is extended, allowing applications of metrics that express productive similarities between agents making up blocking coalitions. Finally, we consider the equivalence of the s-core and the set of cost share equilibrium allocations.

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  • Achille Basile & Robert P. Gilles & Maria Gabriella Graziano & Maria Laura Pesce, 2019. "The Core of Economies with Collective Goods and a Social Division of Labor," CSEF Working Papers 544, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:544
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    23. Robert P. Gilles & Dimitrios Diamantaras, 2003. "To Trade Or Not To Trade: Economies With A Variable Number Of Tradeables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 1173-1204, August.
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    More about this item

    Keywords

    Collective goods; Consumer-producer; Social division of labour; Competitive equilibrium; s-Core; Core equivalence.;
    All these keywords.

    JEL classification:

    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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