In this paper, household is modeled as a two-member collectivity taking Pareto-efficient decisions. The consequences of this assumption are analyze d in a three-good model, in which only total consumption and each mem ber's labor supply are observable. If the agents are assumed egoistic (i.e., they are only concerned with their own leisure and consumptio n), it is possible to derive falsifiable conditions upon household la bor supplies from both a parametric and a nonparametric viewpoint. If , alternatively, agents are altruistic, restrictions obtain in the no nparametric context; useful interpretation stems from the comparison with the characterization of aggregate demand for a private-good econ omy. Copyright 1988 by The Econometric Society.

[The paper proves sufficient conditions for aggregate demand curves to be decreasing in an economy with identical consumers. The restrictions affect the functional form of Engel curves and the shape of expenditures distribution within the economy. It is shown that most of the empirical literature about Engel curves uses functional forms of the type studied here. Eventually, conditions about expenditures distribution are empirically tested.]

This paper develops a general, "collective" model of household labor supply in which agents are characterized by their own (possibly altruistic) preferences and household decisions are only assumed to be Pareto efficient. An alternative interpretation is that there are two stages in the internal decision process: agents first share nonlabor income, according to some given sharing rule; then each one optimally chooses his or her own labor supply and consumption. This setting is shown to generate testable restrictions on labor supplies. Moreover, the observation of labor-supply behavior is sufficient for recovering individual preferences and the sharing rule (up to a constant). Copyright 1992 by University of Chicago Press.

The paper develops a general, "collective" model of household labor supply in which agents are characterized by their own (possibly altruistic) preferences, and household decisions are only assumed to be Pareto efficient. An alternative interpretation is that there are two stages in the internal decision process: agents first share nonlabor income, according to some given sharing rule; then each one optimally chooses his or her own labor supply and consumption. This setting is shown to generate testable restrictions on labor supplies. Moreover, the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule (up to a constant). Finally, the traditional tools of welfare analysis can be adapted to the new setting.

We discuss the most popular static and dynamic models of household behavior. Our main objective is to explain which aspects of household decisions different models can account for. Using this insight, we describe testable implications, identification results, and estimation findings obtained in the literature. Particular attention is given to the ability of different models to answer various types of policy questions.

We consider a simple model of competition under moral hazard with constant return technologies. We consider preferences that are not separable in effort: marginal utility of income is assumed to increase with leisure, especially for high income levels. We show that, in this context, Bertrand competition may result in positive equilibrium profit. This result holds for purely idiosyncratic shocks when only deterministic contracts are considered and extends to unrestricted contract spaces in the presence of aggregate uncertainty. Finally, these findings have important consequences on the definition of an equilibrium. We show that, in this context, a Walrasian general equilibrium à la Prescott‐Townsend may fail to exist: any “equilibrium” must involve rationing.

The first goal of this paper is to provide a simple and general test of the presence of asymmetric information in contractual relationships within a competitive context. We also argue that insurance data are particularly well suited to such empirical investigations. To illustrate this claim, we use data on contracts and accidents to investigate the extent of asymmetric information in the French market for automobile insurance. Using various parametric and nonparametric methods, we find no evidence for the presence of asymmetric information in this market.