Journal ArticleDOI
The endogenous formation of cartels
TLDR
In this paper, the authors discuss large but finite linear market games which are represented as minima of finitely many measures and show that the shape of the generic vNM-Stable Set suggests cartelization of the market.Abstract:
We discuss large but finite linear market games which are represented as minima of finitely many measures. These games describe markets in which the agents decompose into finitely many disjoint groups each of which holds a corner of the market. Most solution concepts like the core, the Shapley value, or the Walrasian equilibrium tend to favor the short side of such market excessively. That is, in the replicated limit or in the continuum version, the short side is awarded all the possible profits even though cooperation within the grand coalition is required. We show that vNM-Stable Sets differ markedly. For large but finite player sets we exhibit vNM solutions that assign wealth to the long side of the market. It turns out that the shape of the generic vNM-Stable Set suggests cartelization of the market.read more
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Posted Content
Stable sets and public projects
TL;DR: In this article, the authors introduce von Neumann-Morgenstern solution concepts in market models involving the choice of a public project and show that stable sets, suitably defined in connection to public goods provision, are consistent with results from bargaining via cartels.
References
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Book
Theory of Games and Economic Behavior
TL;DR: Theory of games and economic behavior as mentioned in this paper is the classic work upon which modern-day game theory is based, and it has been widely used to analyze a host of real-world phenomena from arms races to optimal policy choices of presidential candidates, from vaccination policy to major league baseball salary negotiations.
Journal ArticleDOI
On balanced sets and cores
TL;DR: In this paper, the authors established a direct correspondence between the balanced sets of coalitions of a multi-person game and the conditions that determine whether the game has a core, and showed that such a correspondence can be found for any game.
Journal ArticleDOI
On the core of linear production games
TL;DR: An economic production game is treated, in which players pool resources to produce finished goods which can be sold at a given market price anduality theory of linear programming is used to obtain equilibrium price vectors and to prove the non-emptiness of the core.
Journal ArticleDOI
On market games
Lloyd S. Shapley,Martin Shubik +1 more
TL;DR: In this article, it was shown that the core of a game is the set of outcomes that no coalition can profitably block, and that any game with a core has the same solutions, in the von Neumann-Morgenstern sense, as some totally balanced game.