International Journal of Game Theory

, 38:3

Core extensions for non-balanced TU-games

Authors

  • Camelia Bejan
    • Department of EconomicsRice University MS-22
    • Business Administration ProgramUniversity of Washington-Bothell
Original Paper

DOI: 10.1007/s00182-008-0135-4

Cite this article as:
Bejan, C. & Gómez, J.C. Int J Game Theory (2009) 38: 3. doi:10.1007/s00182-008-0135-4

Abstract

A family of core extensions for cooperative TU-games is introduced. These solution concepts are non-empty when applied to non-balanced games yet coincide with the core whenever the core is non-empty. The extensions suggest how an exogenous regulator can sustain a stable and efficient outcome, financing a subsidy via individual taxes. Economic and geometric properties of the solution concepts are studied. When taxes are proportional, the proportional prenucleolus is proposed as a single-valued selection device. An application of these concepts to the decentralization of a public goods economy is discussed.

Keywords

Core extensionsEfficiencyTaxationPublic goods

JEL Classification

C71H21H41

Copyright information

© Springer-Verlag 2008