Scholarly Works, Economics

Permanent URI for this collection

https://hdl.handle.net/10919/24332
Research articles, presentations, and other scholarship

Browse

Browsing Scholarly Works, Economics by Author "Bahel, Eric"

Now showing 1 - 2 of 2
  • Thumbnail Image
    Matching markets with middlemen under transferable utility
    Atay, Ata; Bahel, Eric; Solymosi, Tamas (Springer, 2023-03)
    This paper studies matching markets in the presence of middlemen. In our framework, a buyer-seller pair may either trade directly or use the services of a middleman; and a middleman may serve multiple buyer-seller pairs. For each such market, we examine the associated TU game. We first show that, in our context, an optimal matching can be obtained by considering the two-sided assignment market where each buyer-seller pair is allowed to use the mediation services of any middleman free of charge. Second, we prove that matching markets with middlemen are totally balanced: in particular, we show the existence of a buyer-optimal (seller-optimal) core allocation where each buyer (seller) receives her marginal contribution to the grand coalition. In general, the core does not exhibit a middleman-optimal allocation, not even when there are only two buyers and two sellers. However, we prove that in these small markets the maximum core payoff to each middleman is her marginal contribution. Finally, we establish the coincidence between the core and the set of competitive equilibrium payoff vectors.
  • Thumbnail Image
    Merge-Proofness and Cost Solidarity in Shortest Path Games
    Bahel, Eric; Gómez-Rúa, María; Vidal-Puga, Juan (Springer, 2025-02)
    We study cost-sharing rules in network problems where agents seek to ship quantities of some good to their respective locations, and the cost on each arc is linear in the flow crossing it. In this context, Core Selection requires that each subgroup of agents pay a joint cost share that is not higher than its stand-alone cost. We prove that the demander rule, under which each agent pays the cost of her shortest path for each unit she demands, is the unique cost-sharing rule satisfying both Core Selection and Merge Proofness. The Merge Proofness axiom prevents distinct nodes from reducing their joint cost share by merging into a single node. An alternative characterization of the demander rule is obtained by combining Core Selection and Cost Solidarity. The Cost Solidarity axiom says that each agent’s cost share should be weakly increasing in the cost matrix.