The core in the presence of externalities

Arbeitspapier

We generalise the coalition structure core to partition function games. Our definition relies only on one crucial assumption, namely that there is some internal consistency in the game: residuals of the deviation play a game similar to the initial one, and –whenever this is possible– they come to a residual core outcome. Deviating players form their optimistic or pessimistic expectations with this in mind. This leads to a recursive definition of the core. When compared to existing approaches, our core concept has a reduced sensitivity to behavioural assumptions. We look at the core of an economy with a common pool resource defined by Funaki and Yamato (1999) and find that for a number of numerical examples our core concept resolves the puzzle, which arose when more naive approaches were used. We outline possibilities for further extensions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 18.2002

Classification and Topics

• Classification: Wirtschaft ; Cooperative Games ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
• Subject: Core ; externalities ; partition function ; behavioural assumptions ; equilibrium ; Core ; Externer Effekt ; Spieltheorie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kóczy, Lásló À.
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/119627
• Last update: 10.03.2025, 11:41 AM CET