On core solutions in economies with asymmetric information

Carlos Hervés-Beloso, Claudia Meo and Emma Moreno Garcia
Authors registered in the RePEc Author Service: Emma Moreno-García

MPRA Paper from University Library of Munich, Germany

Abstract: In a scenario with a continuum of asymmetrically informed agents, we analyze how the initial information of a trader may be altered when she becomes a member of a coalition. In contrast to a perfect competition frame, we first show that neither arbitrarily small coalitions nor large coalitions are enough to block an allocation which is not in the core, due to the market failure produced by asymmetric information. However, under mild assumptions, we extend the characterizations of the core provided by Vind and Schmeidler (1972) to economies with asymmetrically informed traders. We then focus on information sharing rules based on the coalitions' size. Assuming the existence of coalitions to which the sharing rule associates an information finer than all the others, we show that the corresponding cores coincide with the one defined by this finest information. Finally, characterizations for the weak fine, the fine and the private core are obtained as particular cases of this equivalence theorem.

Keywords: Coalitions; asymmetric information economies; information sharing; blocking mechanisms; core (search for similar items in EconPapers)
JEL-codes: C02 D51 D71 D82 (search for similar items in EconPapers)
Date: 2011-03-10, Revised 2011-04-12
New Economics Papers: this item is included in nep-cdm, nep-cta and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/30258/1/MPRA_paper_30258.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:30258

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().