A competitive partnership formation process
Andersson,T. Gudmundsson,J. Talman,A.J.J. Yang,Z.
Andersson,T.
Gudmundsson,J.
Talman,A.J.J.
Yang,Z.
Abstract
A group of heterogeneous agents may form partnerships in pairs. All single agents as well as all partnerships generate values. If two agents choose to cooperate, they need to specify how to split their joint value among one another. In equilibrium, which may or may not exist, no agents have incentives to break up any existing partnerships or form new partnerships. This paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps. When an equilibrium exists, partnership and revenue distribution will be automatically and endogenously determined by the process. Moreover, several fundamental properties of the equilibrium solution and the model are derived.
Description
Date
2014-07
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
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Journal Issue
Keywords
partnership information, adjustment process, equilibrium, assignment market, C62 - Existence and Stability Conditions of Equilibrium, C72 - Noncooperative Games, D02 - Institutions: Design, Formation, Operations, and Impact
Citation
Andersson, T, Gudmundsson, J, Talman, A J J & Yang, Z 2014, 'A competitive partnership formation process', Games and Economic Behavior, vol. 86, no. July 2014, pp. 165-177. https://doi.org/10.1016/j.geb.2014.03.009
License
info:eu-repo/semantics/closedAccess