Formation of Collective Decision-Making Units: Stability and a Solution
AbstractWe study how individuals divide themselves into coalitions and choose a public alternative for each coalition. When preferences have consecutive support and coalition feasible sets are positively population- responsive, the proposed consecutive benevolence solution generates allocations belonging to the coalition structure core and that are also Tiebout equilibria. However, when each coalition follows a single-valued collective decision rule, the coalition structure core may be empty. Our results show that if individual preferences are, in a sense, similar and if members can be as well off when a coalition enlarges, then a stable formation of collective decision-making units can be guaranteed. A predetermined decision rule makes coalitions less stable.
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Bibliographic InfoPaper provided by EconWPA in its series Game Theory and Information with number 0505002.
Length: 25 pages
Date of creation: 05 May 2005
Date of revision: 21 Jun 2005
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Find related papers by JEL classification:
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-07 (All new papers)
- NEP-CDM-2005-05-07 (Collective Decision-Making)
- NEP-DCM-2005-05-07 (Discrete Choice Models)
- NEP-GTH-2005-05-07 (Game Theory)
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