Browsing by Subject "Core"

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  • Korpela, Ville; Lombardi, Michele; Vartiainen, Hannu (2020)
    In this paper, we re-examine the classical questions of implementation theory under complete information in a setting where coalitions are fundamental behavioral units, and the outcomes of their interactions are predicted by applying the solution concept of the core. The planner's exercise includes designing a code of rights that specifies the collection of coalitions having the right to block one outcome by moving to another. A code of individual rights is a code of rights in which only unit coalitions may have blocking powers. We provide the necessary and sufficient conditions for implementation (under core equilibria) by codes of rights, as well as by codes of individual rights. We also show that these two modes of implementation are not equivalent. The results are robust and extend to alternative notions of core, such as an externally stable core. Therefore, coalitions are shown to bring value added to institutional design. The characterization results address the limitations that restrict the relevance of the existing implementation theory. (C) 2019 Elsevier Inc. All rights reserved.
  • Korpela, Ville; Lombardi, Michele; Vartiainen, Hannu (2021)
    The designer's exercise consists of designing a rights structure that formalizes the idea of power distribution in society. A solution is implementable in largest consistent set by a rights structure if there exists a rights structure such that for each preference profile, the largest consistent set of the game played by agents coincides with the set of outcomes that the solution would select for it. In a setting with transfers, every Maskin monotonic solution is implementable. This finding implies that the class of implementable solutions in core equilibria is unaltered by farsighted reasoning. (C) 2021 The Author(s). Published by Elsevier Inc.