Group Consumption with Caring Individuals

Laurens Cherchye, Sam Cosaert, Thomas Demuynck and Bram De Rock

The Economic Journal, 2020, vol. 130, issue 627, 587-622

Abstract: We propose a novel approach to model joint consumption decisions of individuals who care for each other. The model encompasses a continuum of group consumption models situated between the fully co-operative model and the non-cooperative model without caring. We also define a measure for the degree of intragroup cooperation that quantifies how close the observed group behaviour is to fully co-operative behaviour. Following a revealed preference approach, we derive testable implications of the model for empirical data. We use our model to analyse decisions made by children in an experimental setting.

Date: 2020
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Related works:
Working Paper: Group Consumption with Caring Individuals (2020)
Working Paper: Group Consumption with Caring Individuals (2017)
Working Paper: Group consumption with caring individuals (2017)
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