Journal of Political Economy Vol. 104 No. 1 1996
Competition and the Core
Abstract
Core theory is a powerful tool to find competitive market-clearing prices. A familiar economic setting shows this, beginning with a single commodity produced using many factors of production and ending with the general case of many outputs and inputs. The analysis describes when the market has a core. When it has no core, there is a least upper bound on the payment each firm that does not participate in a central market must make that serves as an inducement to restore the core. Since each firm can avoid this penalty by trading in the central market, the result is market-clearing prices that can support an efficient equilibrium.
- Volume
- 104
- Issue
- 1
- Pages
- 85-107
- Sources
- bibtex:phds-export.bib