We prove that every transferable utility (TU) game can be generated by a coalition production economy. Given a TU game, the set of Walrasian payoff vectors of the induced coalition production economy coincides with the core of the balanced cover of the given game. Therefore, a Walrasian...

Suppose that the agents of a matching market contact each other randomly and form new pairs if is in their interest. Does such a process always converge to a stable matching if one exists? If so, how quickly? Are some stable matchings more likely to be obtained by this process than others? In...

We formulate a general model and stability notion for two-sided pairwise matching problems with individually insignificant agents. Matchings are formulated as joint distributions over the characteristics of the populations to be matched. These characteristics can be high-dimensional and need not...

We study the optimal design of a menu of funds by a manager who is required to use linear pricing and does not observe the preferences of investors regarding one of the risky assets. The optimal menu involves bundling of assets and can be explicitly constructed from the solution to a calculus of...

The equilibrium outcome of a strategic interaction between two or more people may depend on the weight they place on each other’s payoff. A positive, negative or zero weight represents altruism, spite or complete selfishness, respectively. Paradoxically, the real, material payoff in...

We study all-pay auctions (or wars of attrition), where the highest bidder wins an object, but all bidders pay their bids. We consider such auctions when two bidders alternate in raising their bids and where all aspects of the auction are common knowledge including bidders' valuations. We...

Affiliation has been a prominent assumption in the study of economic models with statistical dependence. Despite its large number of applications, especially in auction theory, affiliation has limitations that are important to be aware of. This paper shows that affiliation is a restrictive...

Sets closed under rational behavior were introduced by Basu and Weibull (1991) as subsets of the strategy space that contain all best replies to all strategy profiles in the set. We here consider a more restrictive notion of closure under rational behavior: a subset of the strategy space is...