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A Model of Partnership Fornmation

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Author Info
Talman, A.J.J.
Yang, Z.F. (Tilburg University, Center for Economic Research)

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Abstract

This paper presents a model of partnership formation. A set of agents wants to conduct some business or other activities. Agents may act alone or seek a partner for cooperation and need in the latter case to consider with whom to cooperate and how to share the profit in a collaborative and competitive environment. We pro- vide necessary and su±cient conditions under which an equilibrium can be attained. In equilibrium, the partner formation and the payoff distribution are endogenously determined. Every agent realizes his full potential and has no incentive to deviate from either staying independent or from the endogenously determined partner and payoff. The partnership formation problem contains the classical assignment market problem as a special case.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2008-103.

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Date of creation: 2008
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Handle: RePEc:dgr:kubcen:2008103

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Find related papers by JEL classification:
C62 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Existence and Stability Conditions of Equilibrium
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations

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  1. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-64, July. [Downloadable!] (restricted)
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