Collective consumption models with restricted bargaining weights

an empirical assessment based on experimental data

S. Bruyneel, L.J.H. Cherchye, B. de Rock

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We use experimental data to analyze consumption decisions by groups of individuals who have to reach a consensus on spending a joint budget. Our experiment involves dyads (i.e. two-member groups) who have to compose consumption bundles consisting of three commodities (wine, orange juice and M&Ms). We focus on the collective consumption model to describe group behavior. This model represents group decisions as Pareto optimal outcomes of a within-group bargaining process, with rational group members who are each characterized by individual bargaining weights. We also consider specifications of the collective model that restrict the variation of these bargaining weights. A distinguishing feature of our study is that we use revealed preference testing tools to assess the goodness-of-fit and discriminatory power of alternative specifications of the collective model. Our experimental results suggest that the most appropriate model specification allows for a limited variation of the bargaining weights.
Original languageEnglish
Pages (from-to)395-421
JournalReview of Economics of the Household
Volume10
Issue number3
Publication statusPublished - 2012

Fingerprint

group membership
group decision
Group
wine
dyad
commodity
budget
experiment
Collective model
Dyads
Wine
Group behavior
Revealed preference
Experiment
Model specification
Goodness of fit
Commodities
Group decision
Testing

Cite this

@article{c471a210d2384f4584f36056a56e2cf7,
title = "Collective consumption models with restricted bargaining weights: an empirical assessment based on experimental data",
abstract = "We use experimental data to analyze consumption decisions by groups of individuals who have to reach a consensus on spending a joint budget. Our experiment involves dyads (i.e. two-member groups) who have to compose consumption bundles consisting of three commodities (wine, orange juice and M&Ms). We focus on the collective consumption model to describe group behavior. This model represents group decisions as Pareto optimal outcomes of a within-group bargaining process, with rational group members who are each characterized by individual bargaining weights. We also consider specifications of the collective model that restrict the variation of these bargaining weights. A distinguishing feature of our study is that we use revealed preference testing tools to assess the goodness-of-fit and discriminatory power of alternative specifications of the collective model. Our experimental results suggest that the most appropriate model specification allows for a limited variation of the bargaining weights.",
author = "S. Bruyneel and L.J.H. Cherchye and {de Rock}, B.",
year = "2012",
language = "English",
volume = "10",
pages = "395--421",
journal = "Review of Economics of the Household",
issn = "1569-5239",
publisher = "Kluwer Academic Publishers",
number = "3",

}

Collective consumption models with restricted bargaining weights : an empirical assessment based on experimental data. / Bruyneel, S.; Cherchye, L.J.H.; de Rock, B.

In: Review of Economics of the Household, Vol. 10, No. 3, 2012, p. 395-421.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Collective consumption models with restricted bargaining weights

T2 - an empirical assessment based on experimental data

AU - Bruyneel, S.

AU - Cherchye, L.J.H.

AU - de Rock, B.

PY - 2012

Y1 - 2012

N2 - We use experimental data to analyze consumption decisions by groups of individuals who have to reach a consensus on spending a joint budget. Our experiment involves dyads (i.e. two-member groups) who have to compose consumption bundles consisting of three commodities (wine, orange juice and M&Ms). We focus on the collective consumption model to describe group behavior. This model represents group decisions as Pareto optimal outcomes of a within-group bargaining process, with rational group members who are each characterized by individual bargaining weights. We also consider specifications of the collective model that restrict the variation of these bargaining weights. A distinguishing feature of our study is that we use revealed preference testing tools to assess the goodness-of-fit and discriminatory power of alternative specifications of the collective model. Our experimental results suggest that the most appropriate model specification allows for a limited variation of the bargaining weights.

AB - We use experimental data to analyze consumption decisions by groups of individuals who have to reach a consensus on spending a joint budget. Our experiment involves dyads (i.e. two-member groups) who have to compose consumption bundles consisting of three commodities (wine, orange juice and M&Ms). We focus on the collective consumption model to describe group behavior. This model represents group decisions as Pareto optimal outcomes of a within-group bargaining process, with rational group members who are each characterized by individual bargaining weights. We also consider specifications of the collective model that restrict the variation of these bargaining weights. A distinguishing feature of our study is that we use revealed preference testing tools to assess the goodness-of-fit and discriminatory power of alternative specifications of the collective model. Our experimental results suggest that the most appropriate model specification allows for a limited variation of the bargaining weights.

M3 - Article

VL - 10

SP - 395

EP - 421

JO - Review of Economics of the Household

JF - Review of Economics of the Household

SN - 1569-5239

IS - 3

ER -