Competition and the Core
Journal of Political Economy
1996
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.
- DOI
- 10.1086/262018
- Volume
- 104 (1)
- Pages
- 85-107
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref