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Stable and efficient coalitional networks

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  • CAULIER, Jean-François

    ()
    (CES, Université Paris 1 Panthéon-Sorbonne, F-75647 Paris, France)

  • MAULEON, Ana

    ()
    (CEREC, Facultés universitaires Saint-Louis, B-1000 Brussels, Belgium and Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

  • SEMPERE-MONERRIS, José J.

    ()
    (Department of Economic Analysis and ERI-CES, Universidad de Valencia, E-46022 Valencia, Spain and Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

  • VANNETELBOSCH, Vincent

    ()
    (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

Abstract

We develop a theoretical framework that allows us to study which bilateral links and coalition structures are going to emerge at equilibrium. We define the notion of coalitional network to represent a network and a coalition structure, where the network specifies the nature of the relationship each individual has with her coalition members and with individuals outside her coalition. To predict the coalitional networks that are going to emerge at equilibrium we propose the concepts of strong stability and of contractual stability. Contractual stability imposes that any change made to the coalitional network needs the consent of both the deviating players and their original coalition partners. Requiring the consent of coalition members under the simple majority or unanimity decision rule may help to reconcile stability and effiency. Moreover, this new framework can provide in- sights that one cannot obtain if coalition formation and network formation are tackled separately and independently.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2011039.

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Date of creation: 01 Sep 2011
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Handle: RePEc:cor:louvco:2011039

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Related research

Keywords: networks; coalition structures; stability; efficiency;

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References

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  1. Goyal, S. & Joshi, S., 2000. "Networks of Collaboration in Oligopoly," Econometric Institute Research Papers EI 9952-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
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  3. Mauleon, Ana & Sempere-Monerris, Jose J. & Vannetelbosch, Vincent J., 2011. "Networks of manufacturers and retailers," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 351-367, March.
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  11. Francis Bloch & Bhaskar Dutta, 2008. "Communication networks with endogeneous link strength," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-15, Indian Statistical Institute, New Delhi, India.
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Cited by:
  1. MAULEON, Ana & SEMPERE-MONERRIS, Jose & VANNETELBOSCH, Vincent, 2013. "Contractually stable alliances," CORE Discussion Papers 2013031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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