Competitive Markets, Collective Decisions and Group Formation
Swiss Federal Institute of Technology Zurich, (CER-ETH); Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)
Hans H. Haller
Virginia Polytechnic Institute & State University - Department of Economics
CESifo Working Paper Series No. 953
We consider a general equilibrium model where groups operating in a competitive market environment can have several members and make efficient collective consumption decisions. Individuals have the option to leave the group and make it on their own or join another group. We study the effect of these outside options on group formation, group stability, equilibrium existence, and equilibrium efficiency.
Number of Pages in PDF File: 49
Keywords: Household Behavior, Household Formation, Collective Decision Making, General Equilibrium
JEL Classification: D10, D50, D62, D70
Date posted: June 17, 2003
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