Household behavior and individual autonomy: an extended Lindahl mechanism
(2014) Economic Theory — Vol. 55, n° 3, p. 643-664 (2014)
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- Abstract
- We present a comprehensive model of household economic decision covering both full cooperation and noncooperation as well as semi-cooperative cases, varying with income distribution and a parameter vector $\theta$ representing degrees of individual autonomy with respect to the public goods. In this model, the concept of "household $\theta$-equilibrium" is introduced through the reformulation of the Lindahl equilibrium for Nash implementation and its extension to semi-cooperation. Existence is proved and some generic properties derived. An example is given to illustrate. An important benefit of this approach is to allow for a compact and unified investigation of the testable (local) restrictions of household demand. A particular decomposition of the pseudo-Slutsky matrix is derived and the testability of the various models discussed.
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d’Aspremont-Lynden, C., & Dos Santos Ferreira, R. (2014). Household behavior and individual autonomy: an extended Lindahl mechanism. Economic Theory, 55(3), 643-664. https://doi.org/10.1007/s00199-013-0763-1 (Original work published 2014)