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Club Theory and Household Formation

Author

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  • Gersbach, Hans

    (CER-ETH Zurich)

  • Haller, Hans

    (Department of Economics, Virginia Polytechnic Institute and State University)

Abstract

The relationship between our general equilibrium model with multi- member households and club models with multiple private goods is investigated. The main distinction in the definitions consists of the equilibrium concepts. As a rule, competitive equilibria among households where no group of consumers can benefit from forming a new household and valuation equilibria prove equivalent in the absence of consumption externalities, but not in their presence.

Suggested Citation

  • Gersbach, Hans & Haller, Hans, 2008. "Club Theory and Household Formation," Sonderforschungsbereich 504 Publications 08-11, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    • Handle: RePEc:xrs:sfbmaa:08-11
    Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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    File URL: http://www.sfb504.uni-mannheim.de/publications/dp08-11.pdf
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    References listed on IDEAS

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    1. Haller, Hans, 2000. "Household Decisions and Equilibrium Efficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(4), pages 835-847, November.
    2. Allouch, Nizar & Wooders, Myrna, 2008. "Price taking equilibrium in economies with multiple memberships in clubs and unbounded club sizes," Journal of Economic Theory, Elsevier, vol. 140(1), pages 246-278, May.
    3. Hans Gersbach & Hans Haller, 2005. "When inefficiency begets efficiency," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(1), pages 105-121, January.
    4. 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.
    5. Bryan Ellickson & Birgit Grodal & Suzanne Scotchmer & William R. Zame, 1999. "Clubs and the Market," Econometrica, Econometric Society, vol. 67(5), pages 1185-1218, September.
    6. Wooders, Myrna Holtz, 1988. "Stability of jurisdiction structures in economies with local public goods," Mathematical Social Sciences, Elsevier, vol. 15(1), pages 29-49, February.
    7. Ellickson, Bryan, 1979. "Competitive equilibrium with local public goods," Journal of Economic Theory, Elsevier, vol. 21(1), pages 46-61, August.
    8. Pines,David & Sadka,Efraim & Zilcha,Itzhak (ed.), 1998. "Topics in Public Economics," Cambridge Books, Cambridge University Press, number 9780521561365.
    9. Gilles, Robert P. & Scotchmer, Suzanne, 1997. "Decentralization in Replicated Club Economies with Multiple Private Goods," Journal of Economic Theory, Elsevier, vol. 72(2), pages 363-387, February.
    10. Hideo Konishi, 2010. "Efficient Mixed Clubs: Nonlinear‐Pricing Equilibria With Entrepreneurial Managers," The Japanese Economic Review, Japanese Economic Association, vol. 61(1), pages 35-63, March.
    11. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541, Elsevier.
    12. Cole, Harold L. & Prescott, Edward C., 1997. "Valuation Equilibrium with Clubs," Journal of Economic Theory, Elsevier, vol. 74(1), pages 19-39, May.
    13. Dreze, J H & Greenberg, J, 1980. "Hedonic Coalitions: Optimality and Stability," Econometrica, Econometric Society, vol. 48(4), pages 987-1003, May.
    14. Hans Gersbach & Hans Haller, 2009. "The affectionate society: does competition for partners promote friendliness?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(3), pages 389-403, September.
    15. Hans Gersbach & Hans Haller, 2001. "Collective Decisions and Competitive Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(2), pages 347-368.
    16. Suzanne Scotchmer, 2006. "Consumption Externalities, Rental Markets and Purchase Clubs," Studies in Economic Theory, in: Christian Schultz & Karl Vind (ed.), Institutions, Equilibria and Efficiency, chapter 19, pages 351-369, Springer.
    17. Hans Gersbach & Hans Haller, 2009. "Bargaining power and equilibrium consumption," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(4), pages 665-690, November.
    18. Wooders, Myrna Holtz, 1989. "A Tiebout theorem," Mathematical Social Sciences, Elsevier, vol. 18(1), pages 33-55, August.
    19. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    20. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    21. Hans Gersbach & Hans Haller, 2002. "Competitive Markets, Collective Decisions and Group Formation," Discussion Papers 02-11, University of Copenhagen. Department of Economics.
    22. Donald A. Walker (ed.), 2000. "Equilibrium," Books, Edward Elgar Publishing, volume 0, number 1585.
    23. Berglas, Eitan, 1976. "On the Theory of Clubs," American Economic Review, American Economic Association, vol. 66(2), pages 116-121, May.
    24. Andreu Mas-Colell, 1980. "Efficiency and Decentralization in the Pure Theory of Public Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 625-641.
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    Cited by:

    1. Hans Gersbach & Hans Haller, 2011. "General Equilibrium with Multi-Member Households and Production," CESifo Working Paper Series 3659, CESifo.
    2. Hans Gersbach & Hans Haller, 2018. "Power at general equilibrium," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(3), pages 425-455, March.
    3. Gersbach, Hans & Haller, Hans, 2019. "Households, markets and public choice," Mathematical Social Sciences, Elsevier, vol. 100(C), pages 16-28.
    4. Konishi, Hideo, 2013. "Entrepreneurial land developers: Joint production, local externalities, and mixed housing developments," Journal of Urban Economics, Elsevier, vol. 75(C), pages 68-79.
    5. Hans Gersbach & Hans Haller, 2011. "Bargaining cum voice," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(2), pages 199-225, February.
    6. Hans Gersbach & Hans Haller & Hideo Konishi, 2015. "Household formation and markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(3), pages 461-507, August.
    7. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2010. "Trade and welfare: Does industrial organization matter?," Economics Letters, Elsevier, vol. 109(2), pages 85-87, November.
    8. Hideo Konishi, 2011. "Entrepreneurial Land Developers: Joint Production, Local Externalities, and Mixed Housing," Boston College Working Papers in Economics 777, Boston College Department of Economics, revised 06 Apr 2013.
    9. José Luis Contreras & Juan Pablo Torres-Martínez, 2021. "The roommate problem with externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(1), pages 149-165, March.

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    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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