Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26414 
Year of Publication: 
2008
Series/Report no.: 
CESifo Working Paper No. 2369
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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
power
exit
JEL: 
D41
D50
D60
Document Type: 
Working Paper
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