Marshallian Money, Welfare and Side-Payments
University of California, Santa Barbara - Department of Economics
Lloyd S. Shapley
University of California at Los Angeles
Yale University - School of Management; Yale University - Cowles Foundation
September 28, 2009
Cowles Foundation Discussion Paper No. 1729
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, E4working papers series
Date posted: September 28, 2009
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