Abstract

In a market with indivisibilities, Roth and Postlewaite (1977) show that the (weak) core can suffer from instability problems, in the sense that groups of individuals might upset the equilibrium by recontracting among themselves. By contrast, the strong core is stable. Following the seminal contribution of Koray and Yildiz (2018), we re-examine the classical questions of implementation theory under complete information in a setting where coalitions are fundamental behavioral units, and the outcomes of their interactions are predicted by applying the solution concept of the strong core. The planner’s exercise includes designing a code of rights that specifies the collection of coalitions having the right to block one outcome by moving to another.

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