Econometrica: Jul 1979, Volume 47, Issue 4

Existence of a Core When There Are Increasing Returns

https://doi.org/0012-9682(197907)47:4<869:EOACWT>2.0.CO;2-F
p. 869-876

W. W. Sharkey

A model of a cooperative game without side payments is used to study the core of an economy subject to increasing returns. The major result is that quasi-convexity and subhomogeneity of the cost function along with restrictive but plausible conditions on preferences are sufficient for the existence of a core. Implications are considered for both partial and general equilibrium analysis.

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