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Stable agreements through liability rules: A multi-choice game approach to the social cost problem

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  • Techer, Kevin

Abstract

We consider a class of social cost problems in which one polluter interacts with an arbitrary number of potential victims. Agents are supposed to cooperate and negotiate an optimal pollution level together with monetary transfers. We examine multi-choice cooperative games associated with a social cost problem and an assignment (or mapping) of rights. We introduce a class of mappings of rights that takes into account the pollution intensity and we consider three properties on mappings of rights: core compatibility, Kaldor–Hicks core compatibility and no veto power for a victim. We show that there exist only two families of mappings of rights that satisfy core compatibility, while no mapping of rights satisfies Kaldor–Hicks core compatibility and no veto power for a victim.

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  • Techer, Kevin, 2021. "Stable agreements through liability rules: A multi-choice game approach to the social cost problem," Mathematical Social Sciences, Elsevier, vol. 111(C), pages 77-88.
    • Handle: RePEc:eee:matsoc:v:111:y:2021:i:c:p:77-88
    DOI: 10.1016/j.mathsocsci.2021.04.003
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    Cited by:

    1. David Lowing & Kevin Techer, 2022. "Marginalism, egalitarianism and efficiency in multi-choice games," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(4), pages 815-861, November.
    2. David Lowing & Kevin Techer, 2021. "Marginalism, Egalitarianism and E ciency in Multi-Choice Games," Working Papers halshs-03334056, HAL.
    3. David Lowing & Makoto Yokoo, 2023. "Sharing values for multi-choice games: an axiomatic approach," Working Papers hal-04018735, HAL.
    4. Aivazian, Varouj A. & Callen, Jeffrey L., 2023. "The Coase Theorem and the empty core: Inspecting the entrails after four decades," International Review of Law and Economics, Elsevier, vol. 73(C).

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