Working Paper Number
WP #08006, March 2008 revised November 2008; Old working paper #12882
Competitive behaviors such as outbidding one's rivals may be countered by the rivals' threat of mutually destructive objections. In an Arrow-Debreu model of production economies with firms privatized by property rights, we model such hindered competitive behaviors as a coalition's attempt to block a status quo given the threat that the outsiders of the coalition, especially those with whom the coalition shares ownership of firms, may resort to production-ruining secession. We introduce new concepts of the core such that a coalition's blocking plan is feasible only if it is not blocked by the outsiders with such secession. Based on such notions, we prove core equivalence theorems in the replication framework.
Revised version: November 2008 (Original draft: March 2008)
Xiong, Siyang and Zheng, Charles Zhoucheng, "Interactive blocking in Arrow-Debreu economies" (2008). Economics Working Papers (2002–2016). 163.