Cooperation in capital deposits
AbstractThe rate of return earned on a deposit can depend on its term, the amount of money invested in it, or both. Most banks, for example, offer a higher interest rate for longer term deposits. This implies that if one individual has capital available for investment now, but needs it in the next period, whereas the opposite holds for another individual, then they can both benefit from cooperation since it allows them to invest in a longer term deposit. A similar situation arises when the rate of return on a deposit depends on the amount of capital invested in it. Although the benefits of such cooperative behavior may seem obvious to all individuals, the actual participation of an individual depends on what part of the revenues he eventually receives. The allocation of the jointly earned benefits to the investors thus plays an important part in the stability of the cooperation. This paper provides a game theoretical analysis of this allocation problem. Several classes of corresponding deposit games are introduced. For each class, necessary conditions for a nonempty core are provided, and allocation rules that yield core-allocations are examined.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tilburg University in its series Open Access publications from Tilburg University with number urn:nbn:nl:ui:12-84639.
Date of creation: 2001
Date of revision:
Publication status: Published in OR Spektrum (2001) v.23, p.265-281
Contact details of provider:
Web page: http://www.tilburguniversity.edu/
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Josep Maria Izquierdo Aznar & Carlos Rafels Pallarola, 1996. "A generalization of the bankruptcy game: financial cooperative games," Working Papers in Economics 9, Universitat de Barcelona. Espai de Recerca en Economia.
- Douglas W. Diamond & Philip H. Dybvig, 2000.
"Bank runs, deposit insurance, and liquidity,"
Federal Reserve Bank of Minneapolis, issue Win, pages 14-23.
- Sprumont, Yves, 1990. "Population monotonic allocation schemes for cooperative games with transferable utility," Games and Economic Behavior, Elsevier, vol. 2(4), pages 378-394, December.
- Ehud Kalai & Eitan Zemel, 1980. "On Totally Balanced Games and Games of Flow," Discussion Papers 413, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Borm, P.E.M. & Hamers, H.J.M. & Hendrickx, R.L.P., 2001.
"Operations Research Games: A Survey,"
2001-45, Tilburg University, Center for Economic Research.
- Peter Borm & Herbert Hamers & Ruud Hendrickx, 2001. "Operations research games: A survey," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer, vol. 9(2), pages 139-199, December.
- Suijs, J.P.M., 1999. "Price Uncertainty in Linear Production Situations," Discussion Paper 1999-91, Tilburg University, Center for Economic Research.
- Hitoshi Matsushima, 2010.
"Finitely Repeated Prisoners' Dilemma with Small Fines: Penance Contract,"
CIRJE-F-720, CIRJE, Faculty of Economics, University of Tokyo.
- Hitoshi Matsushima, 2010. "Finitely Repeated Prisoners' Dilemma with Small Fines: Penance Contract," CARF F-Series CARF-F-208, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
- van Gulick, Gerwald & Borm, Peter & De Waegenaere, Anja & Hendrickx, Ruud, 2010.
"Deposit games with reinvestment,"
European Journal of Operational Research,
Elsevier, vol. 200(3), pages 788-799, February.
- Eran Binenbaum, 2008. "Incentive Issues In R&D Consortia: Insights From Applied Game Theory," Contemporary Economic Policy, Western Economic Association International, vol. 26(4), pages 636-650, October.
- Ozen, U. & Slikker, M. & Norde, H.W., 2007. "A General Framework for Cooperation under Uncertainty," Discussion Paper 2007-57, Tilburg University, Center for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Economists Online Support).
If references are entirely missing, you can add them using this form.