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Title:Exit and power in general equilibrium PDF Logo
Authors:Gersbach, Hans
Haller, Hans
Issue Date:2008
Series/Report no.:CESifo Working Papers 2369
Abstract:We We integrate individual power in groups into general equilibrium models. The relationship between group formation, resource allocation, and the power of specific individuals or particular sociological groups is investigated. We introduce, via an illustrative example, three appealing concepts of power and show that there is no monotonic relationship between these concepts. Then we examine existence of competitive equilibria with free exit and study whether maximal individual power is consistent with Pareto efficiency. As applications, we discuss when power spillovers occur and we identify human relation paradoxes: positive externalities increase, but none of the household members gains in equilibrium. We further identify implicit, determinate and de facto power.
Subjects:group formation
competitive markets
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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