Template-type: ReDif-Paper 1.0
Author-Name: Habis Helga 
Author-Name: Herings P. Jean-Jacques 
Author-workplace-name: METEOR
Title: Cooperation Under Incomplete Contracting
Abstract: We examine the notion of the core when cooperation takes place in a setting with time and uncertainty. We do so in a two-period general equilibrium setting with incomplete markets. Market incompleteness implies that players cannot make all possible binding commitments regarding their actions at different date-events. We unify various treatments of dynamic core concepts existing in the literature. This results in definitions of the Classical Core, the Segregated Core, the Two-stage Core, the Strong Sequential Core, and the Weak Sequential Core. Except for the Classical Core, all these concepts can be defined by requiring absence of blocking in period 0 and at any date-event in period 1. The concepts only differ with respect to the notion of blocking in period 0. To evaluate these concepts, we study three market structures in detail: strongly complete markets, incomplete markets in finance economies, and incomplete markets in settings with multiple commodities.
Keywords: mathematical economics; 
Series: Research Memoranda
Creation-Date: 2009
Number: 026
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:ef044233-b008-4fea-bf45-2bb57a988e5c/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 396903
Handle: RePEc:unm:umamet:2009026