Assignment Games with Externalities

Arbeitspapier

We introduce externalities into a two-sided, one-to-one assignment game by letting the values generated by pairs depend on the behavior of the other agents. Extending the notion of blocking to this setup is not straightforward; a pair has to take into account the possible reaction of the residual agents to be able to assess the value it could achieve. We define blocking in a rather general way that allows for many behavioral considerations or beliefs. The main result of the paper is that a stable outcome in an assignment game with externalities always exists if and only if all pairs are pessimistic regarding the others' reaction following a deviation. The relationship of stability and optimality is also discussed, as is the structure of the set of stable outcomes.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2013:27

Classification and Topics

• Classification: Wirtschaft ; Cooperative Games ; Bargaining Theory; Matching Theory ; Externalities
• Subject: Two-sided matching ; assignment game ; externalities ; stability

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gudmundsson, Jens ; Habis, Helga
• Event: Veröffentlichung
• (who): Lund University, School of Economics and Management, Department of Economics
• (where): Lund
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/260084
• Last update: 10.03.2025, 11:46 AM CET