Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260060 
Year of Publication: 
2013
Series/Report no.: 
Working Paper No. 2013:2
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
A group of heterogeneous agents may form partnerships in pairs. All single agents as well as all partnerships generate values. If two agents choose to cooperate, they need to specify how to split their joint value among one another. In equilibrium, which may or may not exist, no agents have incentives to break up or form new partnerships. This paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps. When an equilibrium exists, partnership and revenue distribution will be automatically and endogenously determined by the process. Moreover, several fundamental properties of the equilibrium solution and the model are derived.
Subjects: 
Partnership formation
adjustment process
equilibrium
assignment market
JEL: 
C62
C72
D02
Document Type: 
Working Paper

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