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

Yukihiko Funaki, Takehiko Yamato

Research output: Contribution to journalArticle

38 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
DOIs
Publication statusPublished - 1999 May

Keywords

  • Core
  • Partition function form
  • Tragedy of the commons

ASJC Scopus subject areas

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

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