Coalitions, agreements and efficiency
AbstractIf agents negotiate openly and form coalitions, can they reach efficient agreements? We address this issue within a class of coalition formation games with externalities where agents' preferences depend solely on the coalition structures they are associated with. We derive Ray and Vohra's (1997) notion of equilibrium binding agreements using von Neumann and Morgenstern abstract stable set and then extend it to allow for arbitrary coalitional deviations (as opposed to nested deviations assumed originally). We show that, while the new notion facilitates the attainment of efficient agreements, inefficient agreements can nevertheless arise
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 136 (2007)
Issue (Month): 1 (September)
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Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
- Effrosyni Diamantoudi & Licun Xue, . "Coalitions, Agreements and Efficiency," Economics Working Papers 2002-9, School of Economics and Management, University of Aarhus.
- DIAMANTOUDI, Effrosyni & XUE, Licun, 2002. "Coalitions, agreements and efficiency," CORE Discussion Papers 2002047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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