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Farsighted Stability in Hedonic Games Author info | Abstract | Publisher info | Download info | Related research | Statistics Effrosyni Diamantoudi
Licun Xue () (Department of Economics, University of Aarhus, Denmark)
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We investigate how rational individuals partition themselves into different coalitions in "hedonic games" [see Banerjee, Konishi and S”nmez (1998) and Bogomolnaia and Jackson (2000)], where individuals' preferences depend solely on the composition of the coalition they belong to. We show that the four solution concepts studied in the literature (core, Nash stability, individual stability and contractual individual stability) exhibit myopia on the part of the players. We amend these notions by endowing players with foresight in that they look many steps ahead and consider only credible outcomes. We show the existence and study the properties of the new solutions, as well as their relation to the previous notions.
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Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number
2000-12.
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Handle: RePEc:aah:aarhec:2000-12Contact details of provider: Web page: http://www.econ.au.dk/afn/
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Keywords: Hedonic games ; coalition structures ; foresight ; Other versions of this item:
Find related papers by JEL classification: C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
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