As we increase the size of an economy by adding more and more agents of each of our two types, the core will
A) shrink
B) increase
C) remain unchanged

Question

Quizplus · Accepted Answer

As the size of an economy increases with more agents of each type, the core tends to shrink. This is because with more agents, there are more possibilities for forming coalitions that can potentially improve upon any given allocation, making it harder for an allocation to satisfy the core's stability criteria.

As We Increase the Size of an Economy by Adding