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| Author: | Telser, L. |
| Title: | Competition and the core |
| Journal: | Journal of Political Economy
1996 : FEB, VOL. 104:1, p. 85-107 |
| Index terms: | COMPETITION POWER PRICES |
| Language: | eng |
| Abstract: | The core theory is a powerful tool to find competitive market-clearing prices. A familiar economic setting shows this, beginning with a single commodity produced using many factors of production and ending with the general case of many outputs and inputs. The analysis describes when the market has a core. When it has no core, there is a least upper bound on the payment each firm that does not participate in a central market must make that serves as an inducement to restore the core. Since each firm can avoid this penalty by trading in the central market, the result is market-clearing prices that can support an efficient equilibrium. |
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