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Coalition Formation and Potential Games

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  • Slikker, Marco

Abstract

In this paper we study the formation of coalition structures in situations described by a cooperative game. Players choose independently which coalition they want to join. The payoffs to the players are determined by an allocation rule on the underlying game and the coalition structure that results from the strategies of the players according to some formation rule. We study two well-known coalition structure formation rules. We show that for both formation rules there exists a unique component efficient allocation rule that results in a potential game and study the coalition structures resulting from potential maximizing strategy profiles.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 37 (2001)
Issue (Month): 2 (November)
Pages: 436-448

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Handle: RePEc:eee:gamebe:v:37:y:2001:i:2:p:436-448

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Web page: http://www.elsevier.com/locate/inca/622836

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References

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  1. Roger B. Myerson, 1978. "Conference Structures and Fair Allocation Rules," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 363, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. Qin, Cheng-Zhong, 1996. "Endogenous Formation of Cooperation Structures," Journal of Economic Theory, Elsevier, Elsevier, vol. 69(1), pages 218-226, April.
  3. Slikker, Marco & Dutta, Bhaskar & van den Nouweland, Anne & Tijs, Stef, 2000. "Potential maximizers and network formation," Mathematical Social Sciences, Elsevier, Elsevier, vol. 39(1), pages 55-70, January.
  4. Ui, Takashi, 2000. "A Shapley Value Representation of Potential Games," Games and Economic Behavior, Elsevier, Elsevier, vol. 31(1), pages 121-135, April.
  5. Roger B. Myerson, 1976. "Graphs and Cooperation in Games," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 246, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, Elsevier, vol. 14(1), pages 124-143, May.
  7. Hart, Sergiu & Mas-Colell, Andreu, 1989. "Potential, Value, and Consistency," Econometrica, Econometric Society, Econometric Society, vol. 57(3), pages 589-614, May.
  8. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, Econometric Society, vol. 51(4), pages 1047-64, July.
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Citations

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Cited by:
  1. Ana Mauleon & Nils Roehl & Vincent Vannetelbosch, 2014. "Constitutions and Social Networks," Working Papers CIE 74, University of Paderborn, CIE Center for International Economics.
  2. Olivier Tercieux & Mark Voorneveld, 2010. "The cutting power of preparation," Computational Statistics, Springer, Springer, vol. 71(1), pages 85-101, February.
  3. Dinko Dimitrov & Claus-Jochen Haake, 2006. "Coalition formation in simple games: The semistrict core," Working Papers 378, Bielefeld University, Center for Mathematical Economics.
  4. Tercieux, O.R.C. & Voorneveld, M., 2005. "The Cutting Power of Preparation," Discussion Paper, Tilburg University, Center for Economic Research 2005-94, Tilburg University, Center for Economic Research.
  5. Dimitrov, Dinko & Haake, Claus-Jochen, 2008. "Stable governments and the semistrict core," Games and Economic Behavior, Elsevier, Elsevier, vol. 62(2), pages 460-475, March.
  6. Garratt, Rod & Qin, Cheng-Zhong, 2000. "Potential Maximization and Coalition Government Formation," University of California at Santa Barbara, Economics Working Paper Series qt2gx2v0qx, Department of Economics, UC Santa Barbara.
  7. Barry Feldman, 2002. "A Dual Model of Cooperative Value," Game Theory and Information, EconWPA 0207001, EconWPA.
  8. repec:pdn:wpaper:74 is not listed on IDEAS
  9. D. Dragone & L. Lambertini & A. Palestini, 2008. "A Class of Best-Response Potential Games," Working Papers 635, Dipartimento Scienze Economiche, Universita' di Bologna.

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