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- Title
A Note on Consumption Sharing and Non-Exclusion Rules.
- Authors
Yew-Kwang Ng; Tollison, Robert D.
- Abstract
The article comments on the effect of discriminatory tastes for sharing partners on the club formation process. This extension of the theory was applied in a discussion of the effects on club size of a non-exclusion rule. A model of consumption sharing is being discussed in the article. The vertical axis of the model measures the individual's rankings of sharing partners, and the horizontal axis measures the number of sharing partners up to an exogenously fixed community size. Into this setting a non-exclusion rule is introduced which states that anyone who wants to be in a club and can pay the pro rata fee must be admitted. The primary effect of this rule is to collapse the kink in the sharing-possibilities relation yielding in this example the completely concave production relation. original model thus derived the conclusion that the non-exclusion rule stimulated the formation of smaller clubs for given indifference curves and for a given effect of the non-exclusion rule on the sharing-possibilities relation. In general this result is not the only thing that could happen in the context of the model. The non-exclusion rule, depending upon its form and vigour of application, can essentially rotate the sharing possibilities curve downward along the vertical axis. In the limit, since the non-exclusion rule is defined as disallowing exclusion on any ground except for the requirement to pay the pro rata fee, it is quite possible that the possibilities curve can be pushed as far as to coincide with the horizontal axis.
- Subjects
CONSUMPTION (Economics); CLUBS; SHARING; BUSINESS partnerships; ECONOMICS
- Publication
Economica, 1974, Vol 41, Issue 164, p446
- ISSN
0013-0427
- Publication type
Article
- DOI
10.2307/2553356