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.
|Date of creation:||30 May 2013|
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- Talman, A.J.J. & Yang, Z.F., 2008.
"A Model of Partnership Formation,"
2008-103, Tilburg University, Center for Economic Research.
- Bettina Klaus & Alexandru Nichifor, 2010. "Consistency in one-sided assignment problems," Social Choice and Welfare, Springer, vol. 35(3), pages 415-433, September.
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- 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.
- Tommy Andersson & Jens Gudmundsson & Dolf Talman & Zaifu Yang, 2013.
"A Competitive Partnership Formation Process,"
13/04, Department of Economics, University of York.
- Andersson, Tommy & Gudmundsson, Jens & Talman, Adolphus & Yang, Zaifu, 2013. "A Competitive Partnership Formation Process," Working Papers 2013:2, Lund University, Department of Economics.
- 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.
- Chung, Kim-Sau, 2000. "On the Existence of Stable Roommate Matchings," Games and Economic Behavior, Elsevier, vol. 33(2), pages 206-230, November.
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