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On coalitional stability of anonymous interim mechanisms


Author Info

  • Gabrielle Demange

    (DELTA, 48 Boulevard Jourdan, 75014 Paris 14, FRANCE)

  • Roger Guesnerie

    (DELTA, 48 Boulevard Jourdan, 75014 Paris 14, FRANCE)


In a situation where agents have private information, we investigate the stability of mechanisms with respect to coalitional deviations. In the cooperative tradition, we first extend the notion of Core, taking into account the information a coalition may have when it forms and the conjectures of outsiders. This leads us to propose a family of Cores rather than a single one. Secondly, we study the stability of Core mechanisms to secession proposals in simple noncooperative games. The two different stability analyses, normative and strategic, tend to give support to the more natural extension of the Core, called Statistical Core, only in situations where some strong form of increasing returns to coalition is met. Without this property, arguments for a concept of Core that is non empty in a reasonably large class of problems are less compelling. Applications to taxation and insurance are given.

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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 18 (2001)
Issue (Month): 2 ()
Pages: 367-389

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Handle: RePEc:spr:joecth:v:18:y:2001:i:2:p:367-389

Note: Received: September 6, 1999; revised version: December 3, 1999
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Keywords: Core; Incentive mechanism.;

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Cited by:
  1. Francoise Forges & Enrico Minelli & Rajiv Vohra, 2000. "Incentives and the Core of an Exchange Economy: A Survey," Working Papers 2000-22, Brown University, Department of Economics.
  2. Bierbrauer, Felix, 2006. "Optimal Income Taxation and Public Good Provision in a Two-Class Economy," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 97, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  3. Felix Bierbrauer, 2005. "Optimal Income Taxation and Public Good Provision in a Two-Class Economy," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2005_25, Max Planck Institute for Research on Collective Goods.
  4. Lazarova, E.A. & Borm, P.E.M. & Velzen, S. van, 2005. "Contracts and Insurance Group Formation by Myopic Players," Discussion Paper 2005-89, Tilburg University, Center for Economic Research.


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