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Marshallian Money, Welfare and Side-PaymentsCheng-Zhong QinUniversity of California, Santa Barbara - Department of Economics Lloyd S. ShapleyUniversity of California at Los Angeles Martin ShubikYale University - School of Management; Yale University - Cowles Foundation September 28, 2009 Cowles Foundation Discussion Paper No. 1729 Abstract: A link between a no-side-payment (NSP) market game and a side-payment (SP) market game can be established by introducing a sufficient amount of an ideal utility-money of constant marginal utility to all agents. At some point when there is "enough money" in the system, if it is "well distributed" the new game will be a SP game. This game can also be related to a pure NSP game where a set of default parameters have been introduced. These parameters play a role similar to the parameters specifying the interpersonal comparisons in the side-payment game. We study this game for the properties of the delta-core and consider both the conditions for the uniqueness of competitive equilibria and a new approach to the second welfare theorem. A discussion of the relationship between market games and strategic market games is also noted.
Number of Pages in PDF File: 27 Keywords: delta-core, enough money, market games JEL Classification: C71, C72, D51, E4 working papers seriesDate posted: September 28, 2009Suggested CitationContact Information
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