Envelopes and Geometrical Covers of Side-Payment Games and Their Market Representations

This paper deals with issues concerning the core as a solution concept for games in coalitional form as well as the use of these games in representing economies of a certain formal type. Side-payment games are imbedded in the more general class of no-side-payment games. It is shown that to a given side-payment game having an empty core one may associate two different no-side-payment games with the same (nonempty) core: the “envelope” and the “geometrical cover.” The discrepancy is explained in terms of market games.