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Efficiency and stability in a strategic model of hedonic coalitions
Author(s) -
RubíBarceló Antoni
Publication year - 2013
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/j.1742-7363.2013.12014.x
Subject(s) - economics , incentive , microeconomics , incentive compatibility , club , welfare , private good , public economics , compatibility (geochemistry) , public good , market economy , medicine , geochemistry , anatomy , geology
This paper analyzes the partitioning of a society into coalitions in a setting where heterogeneous players produce private and club goods. Their preferences are hedonic and are represented by a utility function with two arguments, namely their consumptions of these two goods. The focus is on the compatibility of overall societal welfare with individual incentives to move the coalition or accept new coalition mates under alternative utility specifications and agents’ productivities.