In a liability problem, the asset value of an insolvent firm must be distributed among the creditors and the firm itself, when the firm has some freedom in negotiating with the creditors. We model the negotiations using cooperative game theory and analyze the Shapley value to resolve such...

In two-sided markets with money, core stability and marginalism are often in conflict. We reconcile them with two main results. First, we show that in the assignment game (Shapley & Shubik, 1972), the Banzhaf value is core stable if and only if the game is exact. This is surprising for two...

We study assignment problems with externalities where agents have expectations about the reactions of other agents to group deviations. We present notions of core consistent with such expectations and identify the largest and smallest cores. We restrict the domain of preferences to study the...

Top responsiveness is introduced by Alcalde and Revilla [Journal of Mathematical Economics 40 (2004) 869-887] as a property which induces a rich domain on players's preferences in hedonic games, and guarantees the existence of core stable partitions. We strengthen this observation by proving the...

A new bargaining set based on notions of both internal and external stability is developed in the context of endogenous coalition formation. It allows to make an explicit distinction between within-group and outside-group deviation options. This type of distinction is not present in current...

This paper studies the incentive compatibility of solutions to generalized indivisible good allocation problems introduced by Sonmez (1999), which contain the well-known marriage problems (Gale and Shapley, 1962) and the housing markets (Shapley and Scarf, 1974) as special cases. In particular,...

I consider two-person bargaining problems in which mechanism is selected at the almost ex ante stage---when there is some positive probability that players may have learned their private types---and the chosen mechanism is implemented at the interim stage. For these problems, I define almost ex...

We conduct one of the first laboratory experiments and noncooperative analyses of the de-centralized matching market with transfers (Koopmans and Beckmann,1957; Shapley andShubik,1972; Becker,1973). Some theoretical predictions align with but some differ from experimental evidence. Stable matching,...

Yu and Zhang (2020) propose a job rotation model to study rotation schemes thatwidely exist in real life. In the model agents' rights to consume own endowmentsare restricted, but their rights to trade endowments are unrestricted. This poses aninteresting contrast with the housing market model of...