Sequentially Stable Coalition Structures
AbstractIn this paper, we examine the question of which coalition structures farsighted players form in coalition formation games with externalities. We introduce a stability concept for a coalition structure called a sequentially stable coalition structure. Our concept of domination between two coalition structures is based on a “step-by-step” approach to describe negotiation steps concretely by restricting how coalition structures can change: when one coalition structure is changed to another one, either (i) only one merging of two separate coalitions into a coalition occurs, or (ii) only one breaking up of a coalition into two separate coalitions happens. As applications of our stability notion, we show that the efficient grand coalition structure can be sequentially stable in simple partition function form games and common pool resource games.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2007-96.
Date of creation: 2007
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Find related papers by JEL classification:
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D62 - Microeconomics - - Welfare Economics - - - Externalities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-12-15 (All new papers)
- NEP-CDM-2007-12-15 (Collective Decision-Making)
- NEP-GTH-2007-12-15 (Game Theory)
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