A Model of Partnership Formation

Dolf J. J. Talman, Zaifu Yang
2008 Social Science Research Network  
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 provide necessary and sufficient conditions under which an equilibrium can be attained. In equilibrium, the partner formation and the payoff distribution are endogenously
more » ... ogenously 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.
doi:10.2139/ssrn.1316246 fatcat:fr5z6db37fekbgtzs2hm7kcimy