A Model of Partnership Formation

A.J.J. Talman, Z.F. Yang

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Abstract

This paper presents a model of partnership formation. A set of agents wants to conduct some business or other activities. Agents may act alone or seek a partner for cooperation and need in the latter case to consider with whom to cooperate and how to share the profit in a collaborative and competitive environment. We pro- vide necessary and su±cient conditions under which an equilibrium can be attained. In equilibrium, the partner formation and the payoff distribution are endogenously determined. Every agent realizes his full potential and has no incentive to deviate from either staying independent or from the endogenously determined partner and payoff. The partnership formation problem contains the classical assignment market problem as a special case.
Original languageEnglish
Place of PublicationTilburg
PublisherOperations research
Number of pages16
Volume2008-103
Publication statusPublished - 2008

Publication series

NameCentER Discussion Paper
Volume2008-103

Keywords

  • Partnership formation
  • equilibrium
  • indivisibility
  • assignment market

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