Potential Maximization And Coalition Government Formation
AbstractA model of coalition government formation is presented in which inefficient, non-minimal winning coalitions may form in Nash equilibrium. Predictions for five games are presented and tested experimentally. The experimental data support potential maximization as a refinement of Nash equilibrium. In particular, the data support the prediction that non-minimal winning coalitions occur when the distance between policy positions of the parties is small relative to the value of forming the government. These conditions hold in games 1, 3, 4 and 5, where subjects played their unique potential-maximizing strategies 91, 52, 82 and 84 percent of the time, respectively. In the remaining game (Game 2) experimental data support the prediction of a minimal winning coalition. Players A and B played their unique potential-maximizing strategies 84 and 86 percent of the time, respectively, and the predicted minimal-winning government formed 92 percent of the time (all strategy choices for player C conform with potential maximization in Game 2). In Games 1, 2, 4 and 5 over 98 percent of the observed Nash equilibrium outcomes were those predicted by potential maximization. Other solution concepts including iterated elimination of weakly dominated strategies and strong/coalition-proof Nash equilibrium are also tested.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Game Theory Review.
Volume (Year): 07 (2005)
Issue (Month): 04 ()
Contact details of provider:
Web page: http://www.worldscinet.com/igtr/igtr.shtml
Other versions of this item:
- 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.
- Rod Garratt & Cheng-Zhong Qin & James E. Parco & Amnon Rapoport, 2004. "Potential Maximization and Coalition Government Formation," Working Papers 2004.82, Fondazione Eni Enrico Mattei.
- B4 - Schools of Economic Thought and Methodology - - Economic Methodology
- C0 - Mathematical and Quantitative Methods - - General
- C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- repec:ebl:ecbull:v:3:y:2003:i:12:p:1-11 is not listed on IDEAS
- Slikker, Marco & Dutta, Bhaskar & van den Nouweland, Anne & Tijs, Stef, 2000.
"Potential maximizers and network formation,"
Mathematical Social Sciences,
Elsevier, vol. 39(1), pages 55-70, January.
- Slikker, M., 1999.
"Coalition Formation and Potential Games,"
1999-83, Tilburg University, Center for Economic Research.
- Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, vol. 14(1), pages 124-143, May.
- J. Keith Murnighan & Alvin E. Roth, 1977. "The Effects of Communication and Information Availability in an Experimental Study of a Three-Person Game," Management Science, INFORMS, vol. 23(12), pages 1336-1348, August.
- Qin, Cheng-Zhong, 1996. "Endogenous Formation of Cooperation Structures," Journal of Economic Theory, Elsevier, vol. 69(1), pages 218-226, April.
- repec:ebl:ecbull:v:3:y:2003:i:5:p:1-9 is not listed on IDEAS
- Roger B. Myerson, 1976. "Graphs and Cooperation in Games," Discussion Papers 246, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Amegashie, J. Atsu & Cadsby, C. Bram & Song, Yang, 2007.
"Competitive burnout: Theory and experimental evidence,"
Games and Economic Behavior,
Elsevier, vol. 59(2), pages 213-239, May.
- J. Atsu Amegashie & C. Bram Cadsby & Yang Song, 2005. "Competitive Burnout: Theory and Experimental Evidence," Working Papers 0507, University of Guelph, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tai Tone Lim).
If references are entirely missing, you can add them using this form.