Abstract:

Much of economic theory is concerned with the existence of prices. In particular, economists are interested in whether various outcomes defined by diverse postulates turn out to be actually generated by prices. Whenever this is the case, a theory of endogenous price formation is derived. In the present analysis, a well-known game-theoretic solution concept is considered: value. Nonatomic games are considered that are defined by finitely many nonnegative measures. Nonatomic vector measure games arise, for example, from production models and from finite-type markets. It is shown that the value of such a game need not be a linear combination of the nonatomic nonnegative measures. This is in contrast to all the values known to date. Moreover, this happens even for certain differentiable market games. In the economic models, this means that the value allocations are not necessarily produced by prices. All the examples presented are special cases of a new class of values.