We examine how a shift of bargaining power within households operating in a competitive market environment affects equilibrium allocation and welfare. If price effects are sufficiently small, then typically an individual benefits from an increase of bargaining power, necessarily to the detriment...

We consider a general equilibrium model where multi-member households make efficient collective consumption decisions and operate in a competitive market environment. Individuals have the option to leave the household and make it on their own or join another household. We study the effect of...

The relationship between our general equilibrium model with multi-member households and club models with multiple private goods is investigated. The main distinction in the definitions consists in the equilibrium concepts. As a rule, competitive equilibria among households where no group of...

We present a variant of a general equilibrium model with group formation to study how changes of non-consumptive benefits from group formation impact on the well-being of group members. We identify a human relations paradox: Positive externalities increase, but none of the group members gains in...

We consider firms and multi-member households operating in a competitive market environment. Households are endowed with resources (commodity bundles) and shares of firm ownership. Household members are characterized by individual preferences, possibly with intra-household consumption...

We present a variant of a general equilibrium model with group formation to study how changes of non-consumptive beneï¬ts from group formation impact on the well-being of group members. We identify a human relations paradox: Positive externalities increase, but none of the group members gains...

We consider competitive markets for multiple commodities with endogenous formation of one- or two-person households. Within each two-person household, externalities from the partner’s commodity consumption and unpriced actions are allowed. Each individual has two types of traits: observable...

We introduce uncertainty in our general equilibrium model with multi-member groups, following the classical state-space approach of Arrow- Debreu. A host of new interesting economic issues emerge. First, risk averse agents can attempt to insure themselves through markets or through mutual...

We examine the validity of a macroeconomic version of the Modigliani-Miller theorem. For this purpose, we develop a general equilibrium model with two production sectors, risk-averse households and financial intermediation by banks. Banks are funded by deposits and (outside) equity and monitor...