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Coalitional stability under perfect foresight

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Author Info
Licun Xue (Department of Economics, University of Aarhus, DK-8000 Aarhus C, DENMARK)

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Abstract

We analyze strategic social environments where coalitions can form through binding or nonbinding agreements and actions of a coalition may impose externalities upon the welfare of the rest of the players. We define a solution concept that (1) captures the perfect foresight of the players that has been overlooked in the literature (e.g., Harsanyi [10] and Chwe [6]) and (2) identifies the coalitions that are likely to form and the "stable" outcomes that will not be replaced by any coalition of rational (and hence farsighted) players. The proposed solution concept thereby offers a notion of agreements and coalition formation in complex social environments.

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Publisher Info
Article provided by Springer in its journal Economic Theory.

Volume (Year): 11 (1998)
Issue (Month): 3 ()
Pages: 603-627
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Handle: RePEc:spr:joecth:v:11:y:1998:i:3:p:603-627

Note: Received: February 12, 1996; revised version: March 3, 1997
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  1. Herings, P.J.J. & Mauleon, A. & Vannetelbosch, V.J., 2000. "Social rationalizability," Discussion Paper 81, Tilburg University, Center for Economic Research. [Downloadable!]
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    • Herings,P. Jean-Jacques & Mauleon,Ana & Vannetelbosch,J., 2000. "Social Rationalizability," Research Memoranda 009, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
    • Herings,P. Jean-Jacques & Mauleon,Ana & Vannetelbosch,J., 2002. "Social Rationalizability," Research Memoranda 009, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
    • J. J. Herings & A. Mauleon & V. Vannetelbosch, 2000. "Social Rationalizability," THEMA Working Papers 2000-36, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise. [Downloadable!]
  2. Sheng-Chieh Huang & Xiao Luo, 2008. "Stability, sequential rationality, and subgame consistency," Economic Theory, Springer, vol. 34(2), pages 309-329, February. [Downloadable!] (restricted)
  3. Hannu Vartiainen, 2007. "Dynamic Farsighted Stability," Discussion Papers 22, Aboa Centre for Economics. [Downloadable!]
  4. Jean-Jacques HERINGS & Ana MAULEON & Vincent J. VANNETELBOSCH, 2001. "Rationalizability for Social Environments," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001028, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES). [Downloadable!]
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  5. Frank Page & Myrna Wooders, 2007. "Strategic Basins of Attraction, the Path Dominance Core, and Network Formation Games," Caepr Working Papers 2007-020, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington. [Downloadable!]
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  6. Vincent Vannetelbosch & Gilles Grandjean & Ana Mauleon, 2009. "Connections Among Farsighted Agents," Working Papers 2009.30, Fondazione Eni Enrico Mattei. [Downloadable!]
  7. Jean-Jacques, HERINGS & Ana, MAULEON & Vincent, VANNETELBOSCH, 2006. "Farsightedly stable networks," Discussion Papers (ECON - Département des Sciences Economiques) 2006046, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
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  8. Parkash Chander, 2004. "The Gamma-Core and Coalition Formation," Econometric Society 2004 North American Summer Meetings 108, Econometric Society. [Downloadable!]
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  9. Herings, P. Jean-Jacques & Peeters, Ronald, 2006. "Homotopy Methods to Compute Equilibria in Game Theory," Research Memoranda 046, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
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  10. Page Jr. Frank H & Wooders, Myrna & Kamat, Samir, 2003. "Networks and Farsighted Stability," The Warwick Economics Research Paper Series (TWERPS) 689, University of Warwick, Department of Economics. [Downloadable!]
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  11. Vincent Vannetelbosch & Ana Mauleon & Wouter Vergote, 2008. "Von Neumann-Morgenstern Farsightedly Stable Sets in Two-Sided Matching," Working Papers 2008.29, Fondazione Eni Enrico Mattei. [Downloadable!]
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  12. BHATTACHARYA, Anindya & ZIAD, Abderrahmane, 2003. "On conservative stable standard of behaviour in situations with perfect foresight," CORE Discussion Papers 2003049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  13. Xiao Luo & Yi-Chun Chen, 2004. "A Unified Approach to Information, Knowledge, and Stability," Econometric Society 2004 Far Eastern Meetings 472, Econometric Society. [Downloadable!]
  14. Effrosyni Diamantoudi & Licun Xue, . "Farsighted Stability in Hedonic Games," Economics Working Papers 2000-12, School of Economics and Management, University of Aarhus. [Downloadable!]
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  15. Béal, Sylvain & Durieu, Jacques & Solal, Philippe, 2007. "Farsighted Coalitional Stability in TU-games," Sonderforschungsbereich 504 Publications 07-57, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
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  16. Heller, Yuval, 2008. "All-stage strong correlated equilibrium," MPRA Paper 7717, University Library of Munich, Germany. [Downloadable!]
  17. Xiao Luo, 2009. "On the foundation of stability," Economic Theory, Springer, vol. 40(2), pages 185-201, August. [Downloadable!] (restricted)
  18. Roland Pongou & Lawrence Diffo Lambo & Bertrand Tchantcho, 2008. "Cooperation, stability and social welfare under majority rule," Economic Theory, Springer, vol. 35(3), pages 555-574, June. [Downloadable!] (restricted)
  19. Effrosyni Diamantoudi, . "Equilibrium Binding Agreements under Diverse Bahavioral Assumptions," Economics Working Papers 2001-9, School of Economics and Management, University of Aarhus. [Downloadable!]
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