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Part IV - Club Theory

Published online by Cambridge University Press:  12 October 2017

Edited by
Stephen M. Maurer
Stephen M. Maurer
Affiliation:
University of California, Berkeley
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Summary

A partnership is a coalition that divides its output equally. We show that when partnerships can form freely, a stable or “core” partition into partnerships always exists and is generically unique. When people differ in ability, the equal-sharing constraint inefficiently limits the size of partnerships. We give conditions under which partnerships containing abler people will be larger, and show that if the population is replicated, partnerships may become more or less homogeneous, depending on an elasticity condition. We also examine when the equal-sharing inefficiency vanishes in the limit.

Type
Chapter
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On the Shoulders of Giants
Colleagues Remember Suzanne Scotchmer's Contributions to Economics
 , pp. 230 - 262
Publisher: Cambridge University Press
Print publication year: 2017

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References

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  • Club Theory
  • Edited by Stephen M. Maurer, University of California, Berkeley
  • Book: On the Shoulders of Giants
  • Online publication: 12 October 2017
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  • Club Theory
  • Edited by Stephen M. Maurer, University of California, Berkeley
  • Book: On the Shoulders of Giants
  • Online publication: 12 October 2017
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  • Club Theory
  • Edited by Stephen M. Maurer, University of California, Berkeley
  • Book: On the Shoulders of Giants
  • Online publication: 12 October 2017
Available formats
×