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Core and stable sets of exchange economies with externalities

Author

Listed:
  • Maria Gabriella Graziano

    (Università di Napoli Federico II)

  • Claudia Meo

    (Università di Napoli Federico II)

  • Nicholas C. Yannelis

    (University of Iowa)

Abstract

It is known that the core of an economy with externalities may be empty. We consider two concepts of dominance that allow us to prove that the set formed by individually rational, Pareto optimal allocations is stable and coincides with the core that, consequently, is non-empty.

Suggested Citation

  • Maria Gabriella Graziano & Claudia Meo & Nicholas C. Yannelis, 2023. "Core and stable sets of exchange economies with externalities," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 27-44, April.
    • Handle: RePEc:spr:etbull:v:11:y:2023:i:1:d:10.1007_s40505-022-00239-x
    DOI: 10.1007/s40505-022-00239-x
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    More about this item

    Keywords

    Other-regarding preferences; Externalities; Stable sets; Core;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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