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Formation of Collective Decision-Making Units: Stability and a Solution

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Author Info
Fan-chin Kung (Academia Sinica)

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Abstract

We 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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Paper provided by EconWPA in its series Game Theory and Information with number 0505002.

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Length: 25 pages
Date of creation: 05 May 2005
Date of revision: 21 Jun 2005
Handle: RePEc:wpa:wuwpga:0505002

Note: Type of Document - pdf; pages: 25
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Find related papers by JEL classification:
C62 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - 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

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fan-chin Kung, 2005. "Coalition Formation with Local Public Goods and Network Effect," Game Theory and Information 0506007, EconWPA. [Downloadable!]
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