Interdependent utility and cooperative behavior

In this paper we broaden current models of interdependent utility functions, develop a more general and inclusive model of interdependency, and demonstrate the specific nature of the Pareto improvement achievable through cooperative behavior of all individuals with different tastes who adopt similar (or identical) consumption baskets. The resulting model helps to explain such diverse phenomena as the declining importance of the family unit as well as the trend toward a more diverse consumption pattern among communal groups such as the Israeli kibbutz.