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Competition and the Core

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  • Telser, Lester G

Abstract

Core theory is a powerful tool to find competitive market-clearing prices. A familiar economic setting shows this, beginning with a single commodity produced using many factors of production and ending with the general case of many outputs and inputs. The analysis describes when the market has a core. When it has no core, there is a least upper bound on the payment each firm that does not participate in a central market must make that serves as an inducement to restore the core. Each firm can avoid this penalty by trading in the central market, resulting in market-clearing prices. Copyright 1996 by University of Chicago Press.

Suggested Citation

  • Telser, Lester G, 1996. "Competition and the Core," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 85-107, February.
    • Handle: RePEc:ucp:jpolec:v:104:y:1996:i:1:p:85-107
    DOI: 10.1086/262018
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    References listed on IDEAS

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    1. Roberts, John & Sonnenschein, Hugo, 1977. "On the Foundations of the Theory of Monopolistic Competition," Econometrica, Econometric Society, vol. 45(1), pages 101-113, January.
    2. SCHMEIDLER, David, 1969. "The nucleolus of a characteristic function game," LIDAM Reprints CORE 44, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    4. Sjostrom, William, 1989. "Collusion in Ocean Shipping: A Test of Monopoly and Empty Core Model s," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1160-1179, October.
    5. Vernon L. Smith, 1994. "Economics in the Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 113-131, Winter.
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