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Farsighted Rationality in Hedonic Games

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  • Demeze-Jouatsa, Ghislain-Herman

    (Center for Mathematical Economics, Bielefeld University)

  • Karos, Dominik

    (Center for Mathematical Economics, Bielefeld University)

Abstract

We consider a hedonic coalition formation game in which at each possible partition any new coalition can decide the probability with which to form and leave the current partition. These probabilities are commonly known so that farsighted players can decide whether or not to support a coalition's move: they know which future partition, and hence payoffs, will be reached with what probability. We show that if coalitions make mistakes with positive probability, i.e., if they choose probabilities that are always above some $\varepsilon>0$, then there is a behavior profile in which no coalition has a profitable one-shot deviation.

Suggested Citation

  • Demeze-Jouatsa, Ghislain-Herman & Karos, Dominik, 2021. "Farsighted Rationality in Hedonic Games," Center for Mathematical Economics Working Papers 654, Center for Mathematical Economics, Bielefeld University.
    • Handle: RePEc:bie:wpaper:654
    as

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    File URL: https://pub.uni-bielefeld.de/download/2957924/2957929
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    References listed on IDEAS

    as
    1. Bloch, Francis & van den Nouweland, Anne, 2020. "Farsighted stability with heterogeneous expectations," Games and Economic Behavior, Elsevier, vol. 121(C), pages 32-54.
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    3. Effrosyni Diamantoudi & Licun Xue, 2003. "Farsighted stability in hedonic games," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 21(1), pages 39-61, August.
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    12. Karos, Dominik & Robles, Laura, 2021. "Full farsighted rationality," Games and Economic Behavior, Elsevier, vol. 130(C), pages 409-424.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    abstract games; hedonic games; farsighted stability; coalition stable equilibrium;
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