ON THE CORE OF A LAND TRADING GAME

This paper examines the relationship between the existence of core allocations of an exchange economy with land and the properties of individual preferences over land. An example is given that shows that core allocations might not exist if preferences are only continuous and monotone. It is argued that complementaries between parcels are the cause of this non-existence. Several classes of utility functions are then given that guarantee the existence of core allocations. These classes include additive utility, which is currently the only known assumption on preferences implying a competitive equilibrium exists in this type of economy. © 1991.