Core equivalence in coalition production economies

Joao Victor Lopes () and David Turchick ()

No 2026_19, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: Equivalence between the core and the set of competitive allocations is shown to hold in the limit for large coalition production economies that allow for both decreasing returns to scale and superadditivity of the technology correspondence. Along the way, we shed some light on a separation argument problem with the alleged proof in Böhm (1974a), and on the unfortunate stringency—in terms of an implied near absolute degree of uniformity of ideas or production capabilities across society—of Arrow and Hahn’s (1971) assumptions to tackle core equivalence. Our approach both amends the existing proofs in the literature and widens the scope of the Core Equivalence Theorem, as we show not only by weakening its hypotheses but also by proposing an extension of this classic result to a fuzzy coalition production economy a la Aubin (1979).

Keywords: General Equilibrium; Core Equivalence; Coalition Production Economy; Edgeworth’s Conjecture; Fuzzy Coalition (search for similar items in EconPapers)
JEL-codes: C71 D50 D71 (search for similar items in EconPapers)
Date: 2026-06-30
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