Draw the resulting network and find a balanced outcome

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Question: a . Show that the outcome in Figure 2 is stable and balanced. b . Sunoco is unhappy with only having 4 allowances. In order to negotiate a better deal from Pemex, Sunoco wants to try developing a new relationship with exactly one of the four other companies it ' s not already connected to . If successful, this would add one new non - exchanging edge to the network in Figure 2 ( without adding any new nodes ) . Intuitively ( without doing any calculations ) , what is one company Sunoco can form a relationship with that would destabilize the current arrangement and give it the opportunity to maximize its allowances? Explain. c . Assume that Sunoco is able to form the relationship you described in part b and tries to use this to renegotiate its deal with Pemex. Draw the resulting network and find a balanced outcome where only the split between Sunoco and Pemex changes. All other exchanging pairs should have the same split as they do in Figure 2 . Explain why this new exchange is balanced. d . Does Sunoco get more in the outcome from part c than in the original arrangement?

Reference no: EM133609120

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