We consider a market for lemons in which the seller is a monopolistic price setter and the buyer receives a private noisy signal of the product’s quality. We model this as a game and analyze perfect Bayesian equilibrium prices, trading probabilities and gains of trade. In particular, we vary...

A class of cooperative games arising from shortest path problems is defined. These shortest path games are totally balanced and allow a population-monotonic allocation scheme. Possible methods for obtaining core elements are indicated; first, by relating to the allocation rules in taxation and...