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The Recursive Core

Author

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  • Becker, Robert A
  • Chakrabarti, Subir K

Abstract

An allocation in an infinite horizon capital accumulation model is a recursive core allocation provided no coalition can improve upon its consumption stream at any time given its accumulation of assets up to that period. The authors show for every allocation of consumption in the initial core, one can find a distribution of capital stocks among the agents where no coalition of agents will break the initial core contract at any date. The recursive core links the distribution of capital, the problem of trust in the sense of D. Gale, and time consistent intertemporal contracts. Copyright 1995 by The Econometric Society.

Suggested Citation

  • Becker, Robert A & Chakrabarti, Subir K, 1995. "The Recursive Core," Econometrica, Econometric Society, vol. 63(2), pages 401-423, March.
  • Handle: RePEc:ecm:emetrp:v:63:y:1995:i:2:p:401-23
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    References listed on IDEAS

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    1. Ait-Sahalia, Yacine, 1996. "Testing Continuous-Time Models of the Spot Interest Rate," Review of Financial Studies, Society for Financial Studies, vol. 9(2), pages 385-426.
    2. Hardle, Wolfgang & Linton, Oliver, 1986. "Applied nonparametric methods," Handbook of Econometrics,in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 38, pages 2295-2339 Elsevier.
    3. repec:cup:etheor:v:13:y:1997:i:5:p:615-45 is not listed on IDEAS
    4. Peter C.B. Phillips, 1998. "Econometric Analysis of Fisher's Equation," Cowles Foundation Discussion Papers 1180, Cowles Foundation for Research in Economics, Yale University.
    5. Bergstrom, A. R., 1988. "The History of Continuous-Time Econometric Models," Econometric Theory, Cambridge University Press, vol. 4(03), pages 365-383, December.
    6. Ait-Sahalia, Yacine, 1996. "Nonparametric Pricing of Interest Rate Derivative Securities," Econometrica, Econometric Society, vol. 64(3), pages 527-560, May.
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    Citations

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    Cited by:

    1. Bert Willems, 2000. "Cournot competition in the electricity market with transmission constraints," Energy, Transport and Environment Working Papers Series ete0004, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    2. P. Herings & A. Predtetchinski & A. Perea, 2006. "The Weak Sequential Core for Two-Period Economies," International Journal of Game Theory, Springer;Game Theory Society, pages 55-65.
    3. Laszlo A Koczy, 2000. "The Core of a Partition Function Game," Working Papers Department of Economics ces0025, KU Leuven, Faculty of Economics and Business, Department of Economics.
    4. Josep Maria Izquierdo Aznar & Francesc Llerena & Carlos Rafels Pallarola, 2004. "Sequential decisions in allocation problems," Working Papers in Economics 116, Universitat de Barcelona. Espai de Recerca en Economia.
    5. Damiano, Ettore & Lam, Ricky, 2005. "Stability in dynamic matching markets," Games and Economic Behavior, Elsevier, vol. 52(1), pages 34-53, July.
    6. Predtetchinski, Arkadi, 2007. "The strong sequential core for stationary cooperative games," Games and Economic Behavior, Elsevier, vol. 61(1), pages 50-66, October.
    7. Edward C. Prescott & Jose-Victor Rios-Rull, 2000. "On the equilibrium concept for overlapping generations organizations," Staff Report 282, Federal Reserve Bank of Minneapolis.
    8. Parkash Chander & Myrna Wooders, 2010. "Subgame Perfect Cooperation in an Extensive Game," Vanderbilt University Department of Economics Working Papers 1008, Vanderbilt University Department of Economics.
    9. Habis, Helga & Herings, P. Jean-Jacques, 2011. "Core concepts for incomplete market economies," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 595-609.
    10. repec:eee:jeeman:v:84:y:2017:i:c:p:173-188 is not listed on IDEAS
    11. Parkash Chander & Myrna Wooders, 2016. "The Subgame Perfect Core," Vanderbilt University Department of Economics Working Papers 16-00006, Vanderbilt University Department of Economics.
    12. Habis Helga & Herings P. Jean-Jacques, 2009. "Cooperation Under Incomplete Contracting," Research Memorandum 026, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    13. Hellman, Ziv, 2008. "Bargaining Set Solution Concepts in Dynamic Cooperative Games," MPRA Paper 8798, University Library of Munich, Germany.

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