The hybrid equilibria and core selection in exchange economies with externalities |
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Authors: | Jingang Zhao |
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Institution: | Department of Economics, Ohio State University, 1945 North High Street, Columbus, OH 43210-1172, USA |
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Abstract: | This paper introduces a hybrid equilibrium concept that combines the elements of cooperative and non-cooperative behaviors in an exchange economy with externalities. For a fixed coalition structure (or a partition of traders), the hybrid equilibrium is a price and consumption bundle such that each coalition chooses a core solution from its budget set and the consumption bundles are feasible. It becomes the competitive equilibrium when the position is the finest, and it selects a core allocation when the partition is the coarsest. The paper provides sufficient conditions for the existence of a hybrid equilibrium for any coalition structure. |
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Keywords: | JEL classification: C71 C72 D51 F10 |
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