Core equivalence in a mixed club economy

Article Type

Research Article

Publication Title

Social Choice and Welfare

Abstract

The paper investigates some classical results concerning the core and competitive (club) equilibria in an economy consisting of private and club goods, where club goods are treated as articles of choice just like private goods. We begin with an atomless club economy as in Ellickson (Econometrica 67: 1185-1217, 1999) and then allow for some agents to form cartels. The economy thus formed is characterized by the presence of both negligible and non-negligible agents and is known as a mixed economy. Clubs in our economy are interpreted to have no market power as the amount of inputs required to form them is insignificant compared to the aggregate endowment resources of the economy. The competitive equilibria notion in our setup is known as the club equilibria. In this paper, we follow a kind of similar approach to Greenbergand (J Math Econ 15: 79-83, 1986) and establish the equivalence between the core (resp. club equilibria) of an atomless economy with the core (resp. club equilibria) of its associated mixed economy, which generalizes the core-equivalence theorem of Ellickson (Econometrica 67: 1185-1217, 1999) to the case of a mixed economy with club goods.

DOI

10.1007/s00355-025-01616-8

Publication Date

1-1-2025

Link to Full Text

Share

COinS