A market interpretation of the proportional extended core

Any TU-game can be generated from a production economy with indivisible labor inputs. An equilibrium of that economy always exists after a central intervention that taxes income and subsidizes production. The set of equilibrium allocations corresponding to the smallest income tax coincides with the proportional extended core of the game.

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Year of publication:	2012
Authors:	Bejan, Camelia ; Gómez, Juan Camilo
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 117.2012, 3, p. 636-638
Publisher:	Elsevier
Subject:	Core extensions \| Market games \| Taxes and subsidies

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Type of publication:	Article
Classification:	D51 - Exchange and Production Economies ; D7 - Analysis of Collective Decision-Making ; H2 - Taxation, Subsidies, and Revenue
Source:	RePEc - Research Papers in Economics

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