Cores of games with positive externalities
This paper introduces a core concept, called the Î³-core, in the primitive framework of a strategic game. For a certain class of strategic games, it is a weaker concept than the strong Nash equilibrium, but in general stronger than the conventional Î±- and Î²- cores. We argue that the coalition formation process is an infinitely repeated game and show that the grand coalition forms if the Î³-core is nonempty. This is a weaker sufficient condition than the previous such condition (Maskin (2003, Theorem 4)). As an application of this result, it is shown that the Î³- core of an oligopolistic market is nonempty and thus the grand coalition forms.
|Date of creation:||01 Jan 2010|
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