Cycles and Third-Party Payments in the Partnership Formation Problem
We characterize the core of the partnership formation problem (Talman and Yang, Journal of Mathematical Economics 47, 2011) using cycles in the solution of a linear programming problem. The cycles also lead us to a new and intuitive sufficient condition for the existence of equilibrium, generalizing known results. We then introduce the partnership-stable equilibrium, a weakened solution concept in the sense that each equilibrium is also a partnership-stable equilibrium, and find sufficient and necessary conditions for its existence. Finally, we conduct a simulation study to see how often existence is an issue and which factors affect the rate at which problems have solutions.
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- Talman, Dolf & Yang, Zaifu, 2011.
"A model of partnership formation,"
Journal of Mathematical Economics,
Elsevier, vol. 47(2), pages 206-212, March.
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"A competitive partnership formation process,"
Games and Economic Behavior,
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- Tommy Andersson & Jens Gudmundsson & Dolf Talman & Zaifu Yang, 2013. "A Competitive Partnership Formation Process," Discussion Papers 13/04, Department of Economics, University of York.
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- Andersson, T. & Gudmundsson, J. & Talman, A.J.J. & Yang, Z., 2013. "A Competitive Partnership Formation Process," Discussion Paper 2013-008, Tilburg University, Center for Economic Research.
- Gudmundsson, Jens, 2013. "A Review of the Existence of Stable Roommate Matchings," Working Papers 2013:8, Lund University, Department of Economics.
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- repec:dgr:kubcen:2013008 is not listed on IDEAS
- Johan Karlander & Kimmo Eriksson, 2001. "Stable outcomes of the roommate game with transferable utility," International Journal of Game Theory, Springer, vol. 29(4), pages 555-569.
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