Economic Theory

, 42:591 | Cite as

Private information, transferable utility, and the core

Research Article

Abstract

We consider transferable-utility, cooperative games, featuring differently informed players. Parties can exchange endowments or undertake joint production, but not pool information. Coalitional contracts must therefore comply with members’ private information. Qualitatively different shadow prices then arise: some for material endowments, others for knowledge. We focus on computable core solutions, generated by shadow prices. Such solutions obtain under standard regularity assumptions.

Keywords

Exchange economy Cooperative game Transferable utility Differential information Core Lagrangian duality Value of information 

JEL Classification

C62 C71 D51 D82 

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Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  1. 1.Economics DepartmentBergen UniversityBergenNorway
  2. 2.School of EconomicsUniversity of ManchesterManchesterUK

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