Consumption externalities, rental markets and purchase clubs

Suzanne Scotchmer

Economic Theory, 2005, vol. 25, issue 1, 235-253

Abstract: A premise of general equilibrium theory is that private goods are rival. Nevertheless, many private goods are shared, e.g., through borrowing, through co-ownership, or simply because one person’s consumption affects another person’s wellbeing. I analyze consumption externalities from the perspective of club theory, and argue that, provided consumption externalities are limited in scope, they can be internalized through membership fees to groups. Two important applications are to rental markets and “purchase clubs,” in which members share the goods that they have individually purchased. Copyright Springer-Verlag Berlin/Heidelberg 2005

Keywords: Consumption externalities; Clubs; Purchase clubs; Rental markets. (search for similar items in EconPapers)
Date: 2005
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Chapter: Consumption Externalities, Rental Markets and Purchase Clubs (2006)
Working Paper: Consumption Externalities, Rental Markets and Purchase Clubs (2003)
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DOI: 10.1007/s00199-004-0506-4

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