When Do Market Games Have Transferable Utility

Abstract

A pure exchange economy generates a “market game†in which the allocations achievable by any coalition are determined by the initial endowments of its members. Subject to certain regularity conditions, it is shown that for a market game it is possible to find utility representations for each consumer so that the game can be treated as a game with transferable utility if and only if indirect utility of all consumers can be represented in the Gorman polar form. This is the class for which aggregate demand behaves as if it were the demand of a single consumer.