Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260074 
Year of Publication: 
2013
Series/Report no.: 
Working Paper No. 2013:16
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
We characterize the core of the partnership formation problem (Talman and Yang, Journal of Mathematical Economics 47, 2011) using cycles in the solution of a linear programming problem. The cycles also lead us to a new and intuitive sufficient condition for the existence of equilibrium, generalizing known results. We then introduce the partnership-stable equilibrium, a weakened solution concept in the sense that each equilibrium is also a partnership-stable equilibrium, and find sufficient and necessary conditions for its existence. Finally, we conduct a simulation study to see how often existence is an issue and which factors affect the rate at which problems have solutions.
Subjects: 
Partnership
equilibrium
linear programming
cycles
third-party payments
JEL: 
C62
D02
D60
Document Type: 
Working Paper

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