http://worldcat.org/entity/work/id/794760811

The economics and mathematics of aggregation : formal models of efficient group behavior

The goal of this article is to provide a general characterization of group behavior in a market environment. A crucial feature of our approach is that we do not restrict the form of individual preferences or the nature of individual consumptions; we allow for public as well as private consumption, for intragroup production, and for any type of consumption externalities across group members. Our only assumption is that the group always reaches Pareto efficient decisions. We analyze two main issues. One is testability: what restrictions (if any) on the aggregate demand function characterize the efficient behavior of the group? The second question relates to identifiability; we investigate the conditions under which it is possible to recover the underlying structure -- namely, individual preferences, the decision process and the resulting intragroup transfers -- from the group's aggregate behavior.

Open All Close All