Households, Markets and Public Choice

31 Pages Posted: 17 Sep 2014

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; 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

Date Written: August 25, 2014

Abstract

We develop a model that combines competitive exchange of private commodities across endogenously formed groups with public good provision and global collective decisions. There is a tension between local and global collective decisions. In particular, we show that group formation and collective decisions on public goods may destabilize each other, even if there exist favorable conditions for matching on the one hand, and for global collective decisions on the other hand. We establish sufficient conditions for the existence of competitive equilibria with endogenous household formation and public choice.

Keywords: household formation, matching, general equilibrium, public goods, public choice, median voter theorem

JEL Classification: D10, D51, D62, D70, H20, H41

Suggested Citation

Gersbach, Hans and Haller, Hans H., Households, Markets and Public Choice (August 25, 2014). CESifo Working Paper Series No. 4947. Available at SSRN: https://ssrn.com/abstract=2496909

Hans Gersbach (Contact Author)

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Hans H. Haller

Virginia Polytechnic Institute & State University - Department of Economics ( email )

3021 Pamplin Hall
Blacksburg, VA 24061
United States
540-231-7591 (Phone)
540-231-5097 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
27
Abstract Views
289
PlumX Metrics