Private information, transferable utility, and the core
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.
KeywordsExchange economy Cooperative game Transferable utility Differential information Core Lagrangian duality Value of information
JEL ClassificationC62 C71 D51 D82
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