Deposit Games With Reinvestment
CentER Discussion Paper Series No. 2007-22
21 Pages Posted: 22 May 2007
Date Written: March 2007
In a deposit game coalitions are formed by players combining their capital. The proceeds of their investments then have to be divided among those players. The current model extends earlier work on capital deposits by allowing reinvestment of returns. Two specific subclasses of deposit games are introduced. It is seen that each term dependent deposit game possesses a core element. Capital dependent deposit games are also shown to have a core element and even a population monotonic allocation scheme if the revenue function exhibits increasing returns to scale. Furthermore, it is shown that all superadditive games are deposit games if one allows for debt.
Keywords: cooperative game theory, deposit games, core elements, population monotonic allocation schemes, superadditive games
JEL Classification: C71
Suggested Citation: Suggested Citation