Private versus public consumption within groups: testing the nature of goods from aggregate data
The paper continues investigations of consumption behavior of small groups (see, for example, [the authors, Rev. Econ. Stud. 78, No. 1, 176--198 (2011; Zbl 1215.91046)]). Here, groups are pairs (dyads), and individual preferences of a dyad are represented via a utility function which depends on privately and/or public (joint) consumed goods. The investigated problem is the testability of private versus joint consumption within dyads, or testing the nature of goods from aggregate data. The notions of (unobserved) feasible personalized quantities and feasible personalized prices are introduced as well as definitions of three type of collective rationality (CR): general-CR, public-CR and egoistic-CR. The testability problem is considered within the frame of revealed preference characterization. The authors present propositions about the equivalency of these CRs and appropriate types of the generalized axiom of revealed preferences. These propositions are demonstrated by means of examples.
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