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Information within coalitions: risk and ambiguity

Author

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  • Emma Moreno-García

    (Universidad de Salamanca, IME)

  • Juan Pablo Torres-Martínez

    (University of Chile)

Abstract

We address economies with asymmetric information where agents are not perfectly aware of the informational structure for coalitions. Thus, when joining a coalition, each consumer considers the informational risk and may be uncertain about the prior relevant to her decision. In this context, we introduce cooperative solutions that we refer to as risky core, ambiguous core, and meu-core. We provide existence results and a variety of properties of these concepts, including their coalitional incentive compatibility. We also formalize the intuition that the blocking power of coalitions is increasing with their information but decreasing with the degree of risk or ambiguity aversion faced by their members.

Suggested Citation

  • Emma Moreno-García & Juan Pablo Torres-Martínez, 2020. "Information within coalitions: risk and ambiguity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(1), pages 125-147, February.
    • Handle: RePEc:spr:joecth:v:69:y:2020:i:1:d:10.1007_s00199-018-1159-z
    DOI: 10.1007/s00199-018-1159-z
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    Cited by:

    1. Liu, Zhiwei & Song, Xinxi & Yannelis, Nicholas C., 2020. "Randomization under ambiguity: Efficiency and incentive compatibility," Journal of Mathematical Economics, Elsevier, vol. 90(C), pages 1-11.
    2. Johanna Etner & Meglena Jeleva & Natacha Raffin, 2021. "Climate policy: How to deal with ambiguity?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(1), pages 263-301, July.
    3. Zhiwei Liu & Nicholas C. Yannelis, 2021. "Persuasion in an asymmetric information economy: a justification of Wald’s maxmin preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 801-833, October.

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    More about this item

    Keywords

    Differential information; Risky core; Ambiguous core; meu-core;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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