Clubs and the Market: Large Finite Economies

We study large finite club economies in which agents can belong to several clubs, and care about the characteristics of the other club members. Club memberships must be integer consistent in aggregate. We show that states in the approximate core can approximately be decentralized by prices for private goods and for club memberships, that the approximate core is nonempty, and that approximate club equilibria exist. Our arguments use the convexification tools used for private goods economies, but we also develop a new tool to address the consistency requirement on memberships that are special to club economies. This tool allows us to overcome the integer consistency problems that are avoided in our (1999) paper by assuming a continuum of agents.

[1]  On approximate cores of non-convex economies , 1984 .

[2]  Andreu Mas-Colell,et al.  Efficiency and Decentralization in the Pure Theory of Public Goods , 1980 .

[3]  S. Scotchmer,et al.  Externality Pricing in Club Economies , 1996 .

[4]  Jan K. Brueckner,et al.  Tastes, Skills, and Local Public Goods , 1994 .

[5]  W. Zame,et al.  Clubs and the Market: Continuum Economies , 1997 .

[6]  Mark V. Pauly,et al.  Cores and clubs , 1970 .

[7]  John P. Conley,et al.  Equivalence of the Core and Competitive Equilibrium in a Tiebout Economy with Crowding Types , 1997 .

[8]  S. Zamir,et al.  Existence of Approximate Equilibria and Cores , 1973 .

[9]  S. Scotchmer,et al.  Two-Tier Pricing of Shared Facilities in a Free-Entry Equilibrium , 1985 .

[10]  S. Scotchmer,et al.  On price-taking equilibria in club economies with nonanonymous crowding , 1997 .

[11]  G. Engl,et al.  The law of supply in games, markets and matching models , 1997 .

[12]  R. Gilles,et al.  Decentralization in Replicated Club Economies with Multiple Private Goods , 1995 .

[13]  B. Shitovitz,et al.  Consistent voting rules for competitive local public goods economies , 1988 .

[14]  Bryan Ellickson,et al.  Clubs and the Market , 1999 .

[15]  Robert M. Anderson,et al.  An Elementary Core Equivalence Theorem , 1978 .

[16]  J. M. Buchanan,et al.  An Economic Theory of Clubs , 1965 .

[17]  T. Bewley.  A Critique of Tiebout's Theory of Local Public Expenditures , 1981 .

[18]  David Pines.  Tiebout without politics , 1991 .

[19]  Harold L. Cole,et al.  Valuation Equilibrium with Clubs , 1997 .

[20]  W. Hildenbrand.  Core and Equilibria of a Large Economy. , 1974 .

[21]  Robert J. Aumann,et al.  EXISTENCE OF COMPETITIVE EQUILIBRIA IN MARKETS WITH A CONTINUUM OF TRADERS , 2020, Classics in Game Theory.

[22]  R. Anderson.  Strong Core Theorems with Nonconvex Preferences , 1985 .

[23]  B. Ellickson,et al.  A Generalization of the Pure Theory of Public Goods , 1972 .

[24]  D. Pinés,et al.  CLUBS, LOCAL PUBLIC GOODS AND TRANSPORTATION MODELS A synthesis , 1981 .

[25]  Suzanne Scotchmer,et al.  The Core and the Hedonic Core: Equivalence and Comparative Statistics , 1992 .

[26]  R. Gilles,et al.  Decentralization of Pareto optima in economies with public projects, nonessential private goods and convex costs , 1996 .

[27]  Bryan Ellickson,et al.  Competitive equilibrium with local public goods , 1979 .

[28]  Shlomo Weber,et al.  Strong tiebout equilibrium under restricted preferences domain , 1986 .

[29]  S. Scotchmer.  Profit-maximizing clubs , 1985 .

[30]  Myrna Holtz Wooders,et al.  A Tiebout Theorem , 1989 .

[31]  E. Berglas,et al.  Distribution of tastes and skills and the provision of local public goods , 1976 .

[32]  Harold L. Cole,et al.  Valuation equilibria with clubs , 1996 .

[33]  M. Wooders,et al.  Competitive equilibrium and the core in club economies with anonymous crowding , 1987 .

[34]  Yakar Kannai,et al.  CONTINUITY PROPERTIES OF THE CORE OF A MARKET (REVISED VERSION). , 1970 .

[35]  The Pure Theory of Public Goods: Efficiency, Decentralization, and the Core , 1994 .

[36]  M. Wooders.  Stability of jurisdiction structures in economies with local public goods , 1988 .

[37]  R. Boadway.  On the Method of Taxation and the Provision of Local Public Goods: Comment , 1982 .

[38]  Clubs as a case of competitive industry with goods of variable quality , 1980 .

[39]  Charles M. Tiebout.  A Pure Theory of Local Expenditures , 1956, Journal of Political Economy.

[40]  R. Aumann.  Markets with a continuum of traders , 1964 .