Staff Report 174

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Valuation Equilibria With Clubs

Harold L. Cole - Consultant
Edward C. Prescott - Senior Monetary Advisor

Revised March 1, 1996

Abstract
This paper considers model worlds in which there is a continuum of individuals who form finite-sized associations to undertake joint activities. We show how, through a suitable choice of commodity space, restrictions on the composition of feasible groups can be incorporated into the specification of the consumption and production sets of the economy. We also show that if there are a finite number of types, then the classical results from the competitive analysis of convex finite-agent economies can be reinterpreted to apply.


Published In: Journal of Economic Theory (Vol. 74, No. 1, May 1997, pp. 19-39)

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