Marshallian Money, Welfare and Side-Payments

27 Pages Posted: 28 Sep 2009

See all articles by Cheng-Zhong Qin

Cheng-Zhong Qin

University of California, Santa Barbara (UCSB) - Department of Economics

Lloyd S. Shapley

University of California at Los Angeles

Martin Shubik

Yale University - School of Management; Yale University - Cowles Foundation

Date Written: September 28, 2009

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.

Keywords: delta-core, enough money, market games

JEL Classification: C71, C72, D51, E4

Suggested Citation

Qin, Cheng-Zhong and Shapley, Lloyd S. and Shubik, Martin, Marshallian Money, Welfare and Side-Payments (September 28, 2009). Cowles Foundation Discussion Paper No. 1729, Available at SSRN: https://ssrn.com/abstract=1479667 or http://dx.doi.org/10.2139/ssrn.1479667

Cheng-Zhong Qin

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States

Lloyd S. Shapley

University of California at Los Angeles ( email )

Los Angeles, CA 90095-1481
United States
310-825-4418 (Phone)

Martin Shubik (Contact Author)

Yale University - School of Management ( email )

Box 208200
New Haven, CT 06520-8200
United States

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3694 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://cowles.econ.yale.edu/P/au/d_shubik.htm

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