A generalization of the Shapley-Ichiishi result

The Shapley-Ichiishi result states that a game is convex if and only if the convex hull of marginal vectors equals the core. In this paper we generalize this result by distinguishing equivalence classes of balanced games that share the same core structure. We then associate a system of linear inequalities with each equivalence class, and we show that the system defines the class. Application of this general theorem to the class of convex games yields an alternative proof of the Shapley-Ichiishi result. Other applications range from computation of stable sets in non-cooperative game theory to determination of classes of TU games on which the core correspondence is additive (even linear). For the case of convex games we prove that the theorem provides the minimal defining system of linear inequalities. An example shows that this is not necessarily true for other equivalence classes of balanced games. SSE/EFI Working Paper Series in Economics and Finance, No. 711. MICC-Mathematics, Maastricht University, P.O.Box 616, 6200 MD Maastricht, The Netherlands. Department of Quantitative Economics, Maastricht University, P.O.Box 616, 6200 MD Maastricht, The Netherlands. Department of Economics, Stockholm School of Economics, P.O.Box 6501, 113 83 Stockholm, Sweden. Financial support from the Wallander/Hedelius Foundation is gratefully acknowledged. We thank two anonymous referees and William Thomson for their helpful comments on earlier drafts of this paper and Jean Derks for many fruitful discussions.