ISSN:
1432-1270
Keywords:
core
;
cooperative games
;
balanced
;
lexicographic preferences
Source:
Springer Online Journal Archives 1860-2000
Topics:
Mathematics
,
Economics
Notes:
Abstract The traditional design of cooperative games implicitly assumes that preferences are continuous. However, if agents implement tie breaking procedures, preferences are effectively lexicographic and thus discontinuous. This rouses concern over whether classic core nonemptiness theorems apply in such settings. We show that balanced NTU games may have empty cores when agents have discontinuous preferences. Moreover, exchange economies may lack coalitionally rational trades when consumers implement tie breaking rules, even if these rules are themselves continuous and convex as are all first order preferences. Results are more positive when “utility” is transferable. We prove that balancedness is necessary and sufficient to ensure a nonempty core in lexicographic TU games.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF01245569
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