There is a formal equivalence between games, societies, and economies. Lindahl equilibrium for a game or society corresponds to competitive equilibrium for the equivalent economy. Results on existence and optimality of competitive equilibrium thus apply to the theory of games and societies. The "core" for a game or society as derived by extension from the core of an economy is "too large" to be interesting. An example illustrates that the a-core may be disjoint from the set of Lindahl equilibria. However, if the power of coalitions to inflict negative externalities is suitably restricted, Lindahl equilibria must be in the a-coreo c choice Lindahl equilibria are not in the a-core. We also extend results of Shapley and Shubik (1969), Starrett (1973) and Bergstrom (1976), by demonstrating that the Lindahl equilibrium is in the core when the power of coalitions to impose negative externalities from equilibrium is removed.
II. Models of social interaction
We discuss three alternative models of social interaction. These are a game, a society, and an economy. The notions of game and economy are familiar. Our discussion motivates the notion of a society. It will be shown that all three concepts are related by isomorphism.
Definition 1. Where L g is a linear space, an n person game (YI .