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Cores of games with positive externalities

Author

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  • CHANDER, Parkash

    (National University of Singapore and Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

Abstract

This paper introduces a core concept, called the γ-core, in the primitive framework of a strategic game. For a certain class of strategic games, it is a weaker concept than the strong Nash equilibrium, but in general stronger than the conventional α- and β- cores. We argue that the coalition formation process is an infinitely repeated game and show that the grand coalition forms if the γ-core is nonempty. This is a weaker sufficient condition than the previous such condition (Maskin (2003, Theorem 4)). As an application of this result, it is shown that the γ- core of an oligopolistic market is nonempty and thus the grand coalition forms.

Suggested Citation

  • CHANDER, Parkash, 2010. "Cores of games with positive externalities," LIDAM Discussion Papers CORE 2010004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2010004
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2010.html
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    Citations

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    Cited by:

    1. Chander, Parkash & Wooders, Myrna, 2020. "Subgame-perfect cooperation in an extensive game," Journal of Economic Theory, Elsevier, vol. 187(C).
    2. Wang, Ying, 2021. "Fund-raising and Allocation of Green Climate Fund: Taking Global Pareto Optimality and Fiscal Balance into Consideration," MPRA Paper 106861, University Library of Munich, Germany.
    3. Paraskevas Lekeas & Giorgos Stamatopoulos, 2014. "Cooperative oligopoly games with boundedly rational firms," Annals of Operations Research, Springer, vol. 223(1), pages 255-272, December.
    4. Kim Hang Pham Do & Ariel Dinar & Daene Mckinney, 2012. "Transboundary Water Management: Can Issue Linkage Help Mitigate Externalities?," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 1-20.
    5. Pham Do, Kim Hang & Dinar, Ariel & McKinney, Daene, 2011. "Can issue linkage help mitigate externalities and enhance cooperation," MPRA Paper 37408, University Library of Munich, Germany.

    More about this item

    Keywords

    positive externalities; strategic game; core; repeated game; coalition formation;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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