Competitive behaviors such as outbidding one's rivals may be countered by the rivals' threat of mutually destructive objections. In an Arrow-Debreu model of production economies with firms privatized by property rights, we model such hindered competitive behaviors as a coalition's attempt to block a status quo given the threat that the outsiders of the coalition, especially those with whom the coalition shares ownership of firms, may resort to production-ruining secession. We introduce new concepts of the core such that a coalition's blocking plan is feasible only if it is not blocked by the outsiders with such secession. Based on such notions, we prove core equivalence theorems in the replication framework.
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Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
12882.
Length: 11 pages Date of creation: 17 Mar 2008 Date of revision: Handle: RePEc:isu:genres:12882
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