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The Strong Sequential Core for Two-period Economies

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  • P.J.J. Herings

    (University of Maastricht)

  • H. Peeters

Abstract

The strong sequential core for two-stage economies with a possibly incomplete set of assets in period zero and trade in commodities in period one consists of those goods allocatioans that are in the classical core and moreover, after realization of the state of nature, in the endowments. The strong sequential core coincides with the classical core when all possible state-contigent contracts may serve as an asset. For finance economies it is shown that the strong sequential core is generically empty when there is an incomplete set of assets. Outside the setting of finance economies, we show that the strong sequential core can be empty even if there is an complete set of assets. If the set of constrained feasible allocations resulting from trading in assets, is enlarged to include also allocations outside the agents'comsumption sets, then a complete set of assets is sufficient for the equivalence of the resulting semi-strong sequential core and the classical core.

Suggested Citation

  • P.J.J. Herings & H. Peeters, 2001. "The Strong Sequential Core for Two-period Economies," Microeconomics 0111002, EconWPA.
  • Handle: RePEc:wpa:wuwpmi:0111002 Note: Type of Document - pdf.format; pages: 24
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    File URL: http://econwpa.repec.org/eps/mic/papers/0111/0111002.pdf
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    References listed on IDEAS

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    1. Mas-Colell,Andreu, 1990. "The Theory of General Economic Equilibrium," Cambridge Books, Cambridge University Press, number 9780521388702, November.
    2. Leonidas C. Koutsougeras, 1998. "A two-stage core with applications to asset market and differential information economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 563-584.
    3. P. Herings & A. Predtetchinski & A. Perea, 2006. "The Weak Sequential Core for Two-Period Economies," International Journal of Game Theory, Springer;Game Theory Society, pages 55-65.
    4. Vohra, Rajiv, 1999. "Incomplete Information, Incentive Compatibility, and the Core," Journal of Economic Theory, Elsevier, pages 123-147.
    5. Gale, Douglas, 1978. "The core of a monetary economy without trust," Journal of Economic Theory, Elsevier, vol. 19(2), pages 456-491, December.
    6. Debreu, Gerard, 1972. "Smooth Preferences," Econometrica, Econometric Society, pages 603-615.
    7. Rafael Repullo, 1988. "The Core of an Economy with Transaction Costs," Review of Economic Studies, Oxford University Press, vol. 55(3), pages 447-458.
    8. Laurence Kranich & Andres Perea & Hans Peters, 2000. "Dynamic Cooperative Games," Discussion Papers 00-06, University at Albany, SUNY, Department of Economics.
    9. P. Herings & A. Predtetchinski & A. Perea, 2006. "The Weak Sequential Core for Two-Period Economies," International Journal of Game Theory, Springer;Game Theory Society, pages 55-65.
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    Citations

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    Cited by:

    1. Helga Habis & P. Jean-Jacques Herings, 2011. "Transferable Utility Games with Uncertainty," IEHAS Discussion Papers 1120, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    2. P. Herings & A. Predtetchinski & A. Perea, 2006. "The Weak Sequential Core for Two-Period Economies," International Journal of Game Theory, Springer;Game Theory Society, pages 55-65.
    3. Habis, Helga, 2012. "Sztochasztikus csődjátékok - avagy hogyan osszunk szét egy bizonytalan méretű tortát?
      [Stochastic bankruptcy games. How can a cake of uncertain dimensions be divided?]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1299-1310.
    4. Josep Maria Izquierdo Aznar & Francesc Llerena & Carlos Rafels Pallarola, 2004. "Sequential decisions in allocation problems," Working Papers in Economics 116, Universitat de Barcelona. Espai de Recerca en Economia.
    5. Predtetchinski, Arkadi, 2007. "The strong sequential core for stationary cooperative games," Games and Economic Behavior, Elsevier, vol. 61(1), pages 50-66, October.
    6. Berthold Herrendorf & Christopher Herrington & Ákos Valentinyi, 2015. "Sectoral Technology and Structural Transformation," American Economic Journal: Macroeconomics, American Economic Association, pages 104-133.
    7. Habis, Helga & Herings, P. Jean-Jacques, 2011. "Transferable utility games with uncertainty," Journal of Economic Theory, Elsevier, pages 2126-2139.
    8. Helga Habis & Dávid Csercsik, 2015. "Cooperation with Externalities and Uncertainty," Networks and Spatial Economics, Springer, pages 1-16.
    9. Habis, Helga & Herings, P. Jean-Jacques, 2011. "Transferable utility games with uncertainty," Journal of Economic Theory, Elsevier, pages 2126-2139.
    10. Ehud Lehrer & Marco Scarsini, 2013. "On the Core of Dynamic Cooperative Games," Dynamic Games and Applications, Springer, vol. 3(3), pages 359-373, September.
    11. Ziv Hellman, 2009. "Bargaining Set Solution Concepts in Repeated Cooperative Games," Discussion Paper Series dp523, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    12. Habis, Helga & Herings, P. Jean-Jacques, 2011. "Core concepts for incomplete market economies," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 595-609.
    13. Habis Helga & Herings P. Jean-Jacques, 2009. "Cooperation Under Incomplete Contracting," Research Memorandum 026, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    14. Hellman, Ziv, 2008. "Bargaining Set Solution Concepts in Dynamic Cooperative Games," MPRA Paper 8798, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D2 - Microeconomics - - Production and Organizations
    • D3 - Microeconomics - - Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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