We develop a model that combines competitive exchange of private commodities across endogenously formed groups with public good provision and global collective decisions. There is a tension between local and global collective decisions. In particular, we show that group formation and collective...

A general equilibrium model is introduced where a household may consist of several members, each with individual preferences and/or resources. When households obey collective rationality, certain intrahousehold externalities can be fully internalized by the respective households so that...

We consider competitive markets for multiple commodities with endogenous formation of one- or two-person households. Within each two-person household, externalities from the partner's commodity consumption and unpriced actions are allowed. Each individual has two types of traits: observable...

We introduce uncertainty in our general equilibrium model with multi-member groups, following the classical state-space approach of Arrow-Debreu. A host of new interesting economic issues emerge. First, risk averse agents can attempt to insure themselves through markets or through mutual...

This paper analyzes the effects of sociological changes in the form of a shift of influence within two-member households participating in labor and product markets. The most striking effects occur when household members differ in individual preferences and enjoy positive leisure-dependent...

We consider firms and multi-member households operating in a competitive market environment. Households are endowed with resources (commodity bundles) and shares of firm ownership. Household members are characterized by individual preferences, possibly with intra-household consumption...