Social Loss with Respect to the Core of an Economy with Externalities

Christian Di Pietro (), Maria Graziano and Vincenzo Platino
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Christian Di Pietro: Università di Napoli Parthenope

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We consider a pure exchange economy with externalities. We adopt a cooperative approach to equilibrium analysis, allowing each individual to cooperate with others and to form coalitions. Individual preferences are affected by the consumption of all other agents in the economy, and the consumption set of each agent is affected by the coalition to which he/she belongs. Following Montesano (2002), we introduce a measure of social loss with respect to the gamma-core and alpha-core of the economy which completely characterizes the corresponding core allocations.

Keywords: exchange economy; interdependent preferences; core; social loss (search for similar items in EconPapers)
JEL-codes: C71 D11 D62 D64 (search for similar items in EconPapers)
Date: 2019-07-30, Revised 2019-08-29
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (1)

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Journal Article: Social loss with respect to the core of an economy with externalities (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:538

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