Household behavior and individual autonomy: An extended Lindahl mechanism

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Working paper
Claude d'Aspremont and Rodolphe Dos Santos Ferreira
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We present a comprehensive model of household economic decision covering both fully cooperative and non-cooperative cases as well as semi- cooperative cases, varying with income distribution and a parameter vector θ representing degrees of individual autonomy with respect to the public goods. In this model, the concept of "household θ-equilibrium" is introduced through the reformulation of the Lindahl equilibrium for Nash-implementation and its extension to semi-cooperation. Existence is proved and some generic properties derived. An example is given to illustrate. Finally, a particular decomposition of the pseudo-Slutsky matrix is derived and the testability of the various models discussed.
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