Abstract

http://ssrn.com/abstract=2015414
 
 

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Information, Uncertainty and the Core


R. R. Routledge


University of Liverpool

March 3, 2012


Abstract:     
How are contracts formed when agents face uncertainty, have asymmetric information and cannot write binding agreements? In this paper we propose a solution to this problem. Agents can discuss state-contingent allocations but cannot write binding contracts. At any stage in the contract formation phase a coalition of agents can deviate and choose to form agreements amongst themselves. However, we restrict these deviations to be credible: meaning that no sub-coalition has a further credible deviation. In this context, we propose the coarse and fine weak sequential cores as solution concepts and sufficient conditions for the non-emptiness of these solution concepts are provided.

Number of Pages in PDF File: 32

Keywords: credible deviations, contract formation, cooperative games, asymmetric information

JEL Classification: C71, C73

working papers series





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Date posted: March 5, 2012  

Suggested Citation

Routledge, R. R., Information, Uncertainty and the Core (March 3, 2012). Available at SSRN: http://ssrn.com/abstract=2015414 or http://dx.doi.org/10.2139/ssrn.2015414

Contact Information

R. R. Routledge (Contact Author)
University of Liverpool ( email )
Liverpool, L69 7ZA
United Kingdom
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