On coalitional stability of anonymous interim mechanisms
AbstractIn a situation where agents have private information, we investigate the stability of mechanisms with respect to coalitional deviations. In the cooperative tradition, we first extend the notion of Core, taking into account the information a coalition may have when it forms and the conjectures of outsiders. This leads us to propose a family of Cores rather than a single one. Secondly, we study the stability of Core mechanisms to secession proposals in simple noncooperative games. The two different stability analyses, normative and strategic, tend to give support to the more natural extension of the Core, called Statistical Core, only in situations where some strong form of increasing returns to coalition is met. Without this property, arguments for a concept of Core that is non empty in a reasonably large class of problems are less compelling. Applications to taxation and insurance are given.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 18 (2001)
Issue (Month): 2 ()
Note: Received: September 6, 1999; revised version: December 3, 1999
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Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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- FORGES, Françoise & MINELLI, Enrico & VOHRA, Rajiv, 2001.
"Incentives and the core of an exchange economy: a survey,"
CORE Discussion Papers
2001043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Francoise Forges & Enrico Minelli & Rajiv Vohra, 2000. "Incentives and the Core of an Exchange Economy: A Survey," Working Papers 2000-22, Brown University, Department of Economics.
- Felix Bierbrauer, 2005. "Optimal Income Taxation and Public Good Provision in a Two-Class Economy," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2005_25, Max Planck Institute for Research on Collective Goods.
- Bierbrauer, Felix, 2006. "Optimal Income Taxation and Public Good Provision in a Two-Class Economy," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 97, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Lazarova, E.A. & Borm, P.E.M. & Velzen, S. van, 2005. "Contracts and Insurance Group Formation by Myopic Players," Discussion Paper 2005-89, Tilburg University, Center for Economic Research.
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