The Role Played By Simple Outcomes In Coalition Formation Process Of The Core Outcomes
AbstractIn the one-sided Assignment game any two agents can form a partnership. If this is done, the partners undertake some joint activity, which produces a gain that is split between them. We approach this model by focusing on simple outcomes - feasible and individually rational outcomes where only unmatched agents can block. We prove that this blocking can be done in such a way that the payoffs from the trades done are not changed as players reach the core. The core is non-empty iff every simple and unstable outcome can be extended to a simple outcome by a sequence of adjustments in which, at each step, payoffs are preserved for agents already matched and increased only for those newly matching. Hence, starting from the simple outcome where everybody stands alone, we can gradually increase cooperation by making Pareto improvements (and still staying within simple outcomes), until we reach the core, or until the payoff cannot be simple anymore. That is, increase in payoffs is only available through non-optimal cooperation of some agents. In addition, the total sum of these payoffs is the same at any core outcome. The gains in insight with this approach allows a necessary and sufficient condition for the non-emptiness of the core to be identified. Several properties of the core outcomes of economic interest are proved.
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 University of São Paulo (FEA-USP) in its series Working Papers, Department of Economics with number 2012_27.
Date of creation: 05 Nov 2012
Date of revision:
Contact details of provider:
Postal: Av. Professor Luciano Gualberto, 908 - CEP 05508-900 São Paulo - SP
Web page: http://www.fea.usp.br/feaecon/
More information through EDIRC
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-17 (All new papers)
- NEP-CDM-2012-11-17 (Collective Decision-Making)
- NEP-GTH-2012-11-17 (Game Theory)
- NEP-MIC-2012-11-17 (Microeconomics)
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.:
- Alvin E. Roth & Tayfun Sonmez & M. Utku Unver, 2003.
NBER Working Papers
10002, National Bureau of Economic Research, Inc.
- Roth, Alvin E & Xing, Xiaolin, 1994. "Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions," American Economic Review, American Economic Association, vol. 84(4), pages 992-1044, September.
- Demange, Gabrielle & Gale, David, 1985. "The Strategy Structure of Two-sided Matching Markets," Econometrica, Econometric Society, vol. 53(4), pages 873-88, July.
- Roth, Alvin E, 1984. "The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 991-1016, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Pedro Garcia Duarte).
If references are entirely missing, you can add them using this form.