The core of an economy with a common pool resource: A partition function form approach

Yukihiko Funaki, Takehiko Yamato

    Research output: Contribution to journalArticle

    37 Citations (Scopus)

    Abstract

    In this paper we consider a model of an economy with a common pool resource. Under decreasing returns to scale, it is well-known that no Nash equilibrium attains Pareto efficiency. We examine whether it is possible to achieve Pareto efficiency and avoid the tragedy of the commons through cooperation among players. For that purpose, we use the notion of a game in partition function form. Whether or not the core exists depends crucially on the expectations of each coalition regarding the coalition formation of the outsiders. If each coalition has pessimistic expectations, then the core always exists, while if it has optimistic expectations, the core may be empty.

    Original languageEnglish
    Pages (from-to)157-171
    Number of pages15
    JournalInternational Journal of Game Theory
    Volume28
    Issue number2
    Publication statusPublished - 1999 May

    Fingerprint

    Pareto Efficiency
    Partition Function
    Coalitions
    Resources
    economy
    coalition
    resources
    Coalition Formation
    coalition formation
    Returns to Scale
    efficiency
    Nash Equilibrium
    Game
    Form
    Common pool resources
    Pareto efficiency
    Model

    Keywords

    • Core
    • Partition function form
    • Tragedy of the commons

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Mathematics (miscellaneous)
    • Statistics and Probability
    • Social Sciences (miscellaneous)

    Cite this

    The core of an economy with a common pool resource : A partition function form approach. / Funaki, Yukihiko; Yamato, Takehiko.

    In: International Journal of Game Theory, Vol. 28, No. 2, 05.1999, p. 157-171.

    Research output: Contribution to journalArticle

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