Group Consumption with Caring Individuals.Authors: CHERCHYE Laurens, COSAERT Sam, DEMUYNCK Thomas, DE ROCK Bram.
We propose a novel approach to model joint consumption decisions of individuals who care for each other. The model encompasses a continuum of group consumption models situated between the fully co-operative model and the non-cooperative model without caring. We also define a measure for the degree of intragroup cooperation that quantifies how close the observed group behaviour is to fully co-operative behaviour. Following a revealed preference approach, we derive testable implications of the model for empirical data. We use our model to analyse decisions made by children in an experimental setting.
Reference: CHERCHYE Laurens, COSAERT Sam, DEMUYNCK Thomas, DE ROCK Bram. Group Consumption with Caring Individuals. The Economic Journal, 2020, vol. 130, n°627, pp. 587-622.Keywords: