Generalized externality games: economic applications

Abstract

This paper analyzes two specific economic problems: The division of profits between associated firms and the distribution of cost of a public good. We tackle these problems using game theoretic techniques. To do so, a new c1ass of games in characteristic function form, called Generalizad Externality Games is defined in this paper. Sorne attractive features of this c1ass of games are that the core is non-empty and that these new games there seems to be a connection with relational goods.