DP5687 Clubs and Households

Author(s): Hans Gersbach, Hans Haller
Publication Date: May 2006
Keyword(s): clubs, consumption externalities, general equilibrium, household behaviour, household formation
JEL(s): D13, D50, D62, D71
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5687

The relationship between our general equilibrium model with multimember 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. We provide several examples and applications.