RESEARCH

• Nonemptiness of the f-Core Without Comprehensiveness, (with Dimitar Simeonov), forthcoming in Journal of Public Economic Theory (special issue in honor of Myrna Wooders) (2025).

Abstract This paper analyzes the coalition structure core when coalitions have a finite number of players in atomless NTU games. Kaneko and Wooders (1986) showed that when there are finite types of players the above notion of the core (the f-core) is nonempty. In this paper, we provide a direct proof of the above result using Kakutani's fixed-point theorem when the sizes of coalitions are not only finite but also bounded above. This condition simplifies the presentation of the model and the existence proof. Unlike previous work, we dispense with the comprehensiveness assumption in NTU games, thereby broadening the applicability of our result to include matching problems and hedonic coalition formation models. Furthermore, we show that, in the absence of comprehensiveness, f-core allocations may fail to exhibit equal treatment in payoffs for the same type of players. We also note that Scarf's nonemptiness result for the core of NTU games follows as a corollary of our main theorem. 

https://onlinelibrary.wiley.com/doi/10.1111/jpet.70072

• Equilibrium Land Use with Collective Housing Developments: Voting with Feet and Entrepreneurship, Japanese Economic Review 76, 717-739 (in honor of Professor Masahisa Fujita, 2025). Read-only version https://rdcu.be/exp8Q 

Abstract In urban economics, the monocentric city model has been widely used to analyze equilibrium land use in a city. However, these models often treat housing and land interchangeably and do not explicitly consider collective housing developments. This paper revisits a closed-city monocentric model and presents a framework for analyzing equilibrium land use, allowing for multiple types of housing developments, various consumer types, and arbitrary local government regulations on development. Our equilibrium concept, free-entry equilibrium, is a feasible allocation in which it is not possible to find a profitable housing development with an amenity/pricing policy that can attract tenant residents. To establish a foundation for the analysis, we prove the existence and (constrained) efficiency of the free-entry equilibrium in this model, incorporating local externalities and joint production of housing within each housing development, under minimal assumptions—continuity of utility and cost functions, and compact feasible sets.  

 https://doi.org/10.1007/s42973-025-00213-9 

 Read-only version https://rdcu.be/exp8Q

• International Trade and Income Inequality, (with Taiji Furusawa and Duong Tran Lam Anh), Scandinavian Journal of Economics 122, 993-1026 (2020).

Abstract We propose a simple theory that shows a mechanism through which international trade entails wage and job polarization. We consider two countries in which individuals with different abilities work either as knowledge workers, who develop differentiated products, or as production workers, who engage in production. In equilibrium, ex ante symmetric firms attract knowledge workers with different abilities, and this creates firm heterogeneity in product quality. Market integration disproportionately benefits firms that produce high-quality products. This winner-take-all trend of product markets causes a war for talents, which exacerbates income inequality within the countries and leads to labor-market polarization. 

https://onlinelibrary.wiley.com/doi/full/10.1111/sjoe.12360

• Contributing or Free-Riding? Voluntary Participation in a Public Good Economy, with Taiji Furusawa, Theoretical Economics, 6, 219-256 (2011).

Abstract We consider a (pure) public goods provision problem with voluntary participation in a quasilinear economy. We propose a new hybrid solution concept, the free-riding-proof core (FRP-core), which endogenously determines a contribution group, public goods provision level, and how to share the provision costs. The FRP-core is always nonempty in public goods economies but does not usually achieve global efficiency. The FRP-core has support from both cooperative and noncooperative games. In particular, it is equivalent to the set of perfectly coalition-proof Nash equilibria (Bernheim et al. 1987) of a dynamic game with players' participation decisions followed by a common agency game of public goods provision. We illustrate various properties of the FRP-core with an example. We also show that the equilibrium level of public goods shrinks to zero as the economy is replicated. 

https://onlinelibrary.wiley.com/doi/abs/10.3982/TE567

• Free Trade Networks, (with Taiji Furusawa), Journal of International Economics 72, 310-335, (2007)

Abstract The paper examines the formation of free trade agreements (FTAs) as a network formation game. We consider an n-country model in which (possibly asymmetric) countries trade differentiated industrial commodities. We show that if all countries are symmetric, the complete FTA network is pairwise stable and it is the unique stable network if industrial commodities are not highly substitutable. We also compare FTAs and customs unions (CUs) as to which of these two regimes facilitates global trade liberalization, noticing that unlike CUs, each signatory of an FTA can have another FTA without consent of other member countries. 

https://www.sciencedirect.com/science/article/pii/S0022199606001152

• Credible Group-Stability in Many-to-Many Matching Problems, with M. Utku Ünver, Journal of Economic Theory, 129, 57-80 (2006).

Abstract It is known that in two-sided many-to-many matching problems, pairwise-stable matchings may not be immune to group deviations, unlike in many-to-one matching problems (Blair, 1988). In this paper, we show that pairwise stability is equivalent to credible group stability when one side has responsive preferences and the other side has categorywise-responsive preferences. A credibly group-stable matching is immune to any “executable” group deviations with an appropriate definition of executability. Under the same preference restriction, we also show the equivalence between the set of pairwise-stable matchings and the set of matchings generated by coalition-proof Nash equilibria of an appropriately defined strategic-form game. 

https://www.sciencedirect.com/science/article/pii/S0022053105000402

• Concentration of Competing Retail Stores, Journal of Urban Economics 58, 488-512 (2005).

Abstract The geographical concentration of stores that sell similar commodities is analyzed using a two-dimensional spatial competition model. A higher concentration of stores attracts more consumers with taste uncertainty and low price expectations (a market-size effect), while it leads to fiercer price competition (a price-cutting effect). Our model is general enough to allow for the coexistence of multiple (possibly) asymmetric clusters of stores. We provide sufficient conditions for the nonemptiness of equilibrium store location choices in pure strategies. Through numerical examples, we illustrate the trade-off between the market-size and price-cutting effects, and provide agglomeration patterns of stores in special cases. 

https://www.sciencedirect.com/science/article/pii/S0094119005000562

• Coalition Formation as a Dynamic Process, with Debraj Ray, Journal of Economic Theory, 110, 1-41 (2003).

Abstract We study coalition formation as an ongoing, dynamic process, with payoffs generated as coalitions form, disintegrate, or regroup. A process of coalition formation (PCF) is an equilibrium if a coalitional move to some other state can be “justified” by the expectation of higher future value, compared to inaction. This future value, in turn, is endogenous: it depends on coalitional movements at each node. We study existence of equilibrium PCFs. We connect deterministic equilibrium PCFs with unique absorbing state to the core, and equilibrium PCFs with multiple absorbing states to the largest consistent set. In addition, we study cyclical as well as stochastic equilibrium PCFs. 

https://www.sciencedirect.com/science/article/pii/S0022053103000048

• Core in a Simple Coalition Formation Game, Social Choice and Welfare 18, 135-153, (with Suryapratim Banerjee and Tayfun Sönmez), (2001).

Abstract We analyze the core of a class of coalition formation game in which every player's payoff depends only on the members of her coalition. We first consider anonymous games and additively separable games. Neither of these strong properties guarantee the existence of a core allocation, even if additional strong properties are imposed. We then introduce two top-coalition properties each of which guarantee the existence. We show that these properties are independent of the Scarf-balancedness condition. Finally we give several economic applications. 

https://link.springer.com/article/10.1007/s003550000067

• Formation of Hub Cities: Transportation Cost Advantage and Population Agglomeration, Journal of Urban Economics, 48, 1-28, (2000).

Abstract Many cities are located on rivers or coasts. Such cities developed as transportation hubs or markets for interregional trade, since these locations provide better access to other regions. Local products are collected at such hubs, and interregional trade then takes place among these transportation hubs. As the volume of trade between hubs increases, more workers are needed in order to meet labor demand for shipping and handling commodities, resulting in population agglomeration at such hubs. Formalizing the mechanism described above, this paper constructs a simple three location general equilibrium model, in which transportation hubs and population agglomeration emerge endogenously. 

https://www.sciencedirect.com/science/article/pii/S0094119099921502