Household formation and markets

Hans Gersbach, Hans Haller () and Hideo Konishi

Economic Theory, 2015, vol. 59, issue 3, 507 pages

Abstract: We explore whether stable matchings and trade in commodities can coexist. For this purpose, we consider competitive markets for multiple commodities with endogenous formation of one- or two-person households. Within each two-person household, individuals obtain utility from his/her own private consumption, from discrete actions such as job choice, from the partner’s observable characteristics such as appearance and hobbies, from some of the partner’s consumption vectors, and from the partner’s action choices. We investigate competitive market outcomes with an endogenous household structure in which no individual and no man/woman pair can deviate profitably. We find a set of sufficient conditions under which a stable matching equilibrium exists. We further establish the first welfare theorem for this economy. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Endogenous household formation; Consumption externalities; Stable matching equilibrium; Efficiency; D51; D61; D71 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00199-015-0859-x (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Household Formation and Markets (2016)
Working Paper: Household Formation and Markets (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:59:y:2015:i:3:p:461-507

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-015-0859-x

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().