Continuum economies with finite coalitions: Core, equilibria, and widespread externalities

Peter J. Hammond, Mamoru Kaneko, Myrna Holtz Wooders

Research output: Contribution to journalArticle

38 Citations (Scopus)

Abstract

We develop a new model of a continuum economy with coalitions consisting of only finite numbers of agents. The core, called the f-core, is the set of allocations that are stable against improvement by finite coalitions and feasible by trade within finite coalitions. Even with widespread externalities-preferences depend on own consumptions and also on the entire allocation up to the null set-we obtain the result that the f-core coincides with the Walrasian allocations. Without widespread externalities, the f-core, the Aumann core, and the Walrasian allocations all coincide; however, with widespread externalities there is no obvious natural definition of the Aumann core.

Original languageEnglish
Pages (from-to)113-134
Number of pages22
JournalJournal of Economic Theory
Volume49
Issue number1
DOIs
Publication statusPublished - 1989
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics

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