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In a general equilibrium model, we allow for households with several, typically heterogeneous, members; households that make (efficient) collective consumption decisions where different households may use different collective decision mechanisms; yet households that operate within a competitive market environment. The interaction of two allocation mechanisms, collective decisions and competitive markets, is investigated, with a focus on the efficiency properties and decentralization possibilities of the dual allocation mechanism.
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Gersbach et al. (2001) studied this question.
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