Original Paper

International Journal of Game Theory

, 38:3

First online:

Core extensions for non-balanced TU-games

  • Camelia BejanAffiliated withDepartment of Economics, Rice University MS-22
  • , Juan Camilo GómezAffiliated withBusiness Administration Program, University of Washington-Bothell Email author 

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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.


Core extensions Efficiency Taxation Public goods

JEL Classification

C71 H21 H41