Core and stable sets of exchange economies with externalities

It is known that the core of an economy with externalities may be empty. We consider two concepts of dominance that allow us to prove that the set formed by individually rational, Pareto optimal allocations is stable and coincides with the core that, consequently, is non-empty.

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Bibliographic Details
Published in:Economic theory bulletin 2023-04, Vol.11 (1), p.27-44
Main Authors: Graziano, Maria Gabriella, Meo, Claudia, Yannelis, Nicholas C.
Format: Article
Language:English
Subjects:
Consumption
Dominance
Economic models
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Endowment
Externality
Game Theory
Macroeconomics/Monetary Economics//Financial Economics
Pareto optimum
Public Finance
Research Article
Social and Behav. Sciences
Utility functions
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Description
Summary:It is known that the core of an economy with externalities may be empty. We consider two concepts of dominance that allow us to prove that the set formed by individually rational, Pareto optimal allocations is stable and coincides with the core that, consequently, is non-empty.
ISSN:2196-1085
2196-1093
DOI:10.1007/s40505-022-00239-x