Exit and power in general equilibrium

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2369

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Perfect Competition ; General Equilibrium and Disequilibrium: General ; Welfare Economics: General
• Subject: group formation ; competitive markets ; power ; exit ; Gruppentheorie ; Wirtschaftliche Macht ; Allgemeines Gleichgewicht ; Marktaustritt ; Pareto-Optimum ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gersbach, Hans ; Haller, Hans
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/26414
• Last update: 10.03.2025, 11:43 AM CET