Efficient Mixed Clubs:Nonlinear-Pricing Equilibria with EntrepreneurialManagers

Scotchmer and Wooders (1987) show that efficient clubs are homogeneouswhen consumers are divisible in Berglas’s (1976) anonymouscrowding model. However, if consumers are not divisible or ifclubs have multiple facilities with economies of scope, mixed clubs areefficient. In such a model, we consider clubs with multiple membershippolicies for different types of consumers, and show the existenceand efficiency of equilibrium with nonlinear policies. We employ entrepreneurialequilibrium, an equilibrium concept with profit-seekingentrepreneurs. Our theorem can be regarded as showing the existenceof a core allocation that satisfies envy-free property in the absence ofnonanonymous crowding effects....