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This material has been published in
Social
Choice and Welfare 14, 513-525 (1997), the only definitive repository
of the content that has been certified and accepted after peer review.
Copyright is retained by Springer-Verlag. The original publication is available
on LINK at http://link.springer.de
Non-Cooperative Implementation of the
Core
Social Choice and Welfare 14,
(1997), 513-525
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Abstract
The aim of this paper is to examine the non-cooperative basis
of the core. We provide mechanisms that are motivated closely by the very description of the core, and have the property
that their non-cooperative equilibrium outcomes coincide with the core. For general
economic environments we construct an extensive form mechanism in which each player
proposes a status-quo and then also has an opportunity to recontract with any other
coalition. A proposal to recontract is enforced if and only if it meets with the
unanimous approval of such a coalition. We show that subgame perfect outcomes of this
mechanism coincide with the core allocations of the underlying economy. We also consider
situations, such as labor managed firms, in which the mechanism designer does not know
the set of feasible allocations but can observe the output (utility).
© 1997 Springer Verlag
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