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Coalition Formation in a Five-Person Market Game


  • Amnon Rapoport

    (University of North Carolina)

  • James P. Kahan

    (The Rand Corporation, Santa Monica)


Market games constitute a class of cooperative n-person games with sidepayments in which several coalitions may form simultaneously. In order to study coalition forming behavior in such games and to test the descriptive power of four major solution concepts that yield differing prescriptions for market games, 11 pentads of students each played 6 different market games presented in characteristic function form through a computer-controlled experimental procedure. The outcomes showed strong consistencies over pentads and sharp differences among games. None of the models fully accounted for these data. Instead, considerations of sequential formation of coalitions within a coalition structure, the concept of maximal share structure suggested in the equal share solution, and a recently developed model, that encompasses the predictions of the bargaining set and equal shares, served jointly as the first-order determinants of both the decision of which coalition to form and the allocation of payoff to coalition members.

Suggested Citation

  • Amnon Rapoport & James P. Kahan, 1984. "Coalition Formation in a Five-Person Market Game," Management Science, INFORMS, vol. 30(3), pages 326-343, March.
  • Handle: RePEc:inm:ormnsc:v:30:y:1984:i:3:p:326-343

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    References listed on IDEAS

    1. Ian I. Mitroff, 1972. "The Myth of Objectivity OR Why Science Needs a New Psychology of Science," Management Science, INFORMS, vol. 18(10), pages 613-618, June.
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    Cited by:

    1. Baron, David P. & Bowen, T. Renee & Nunnari, Salvatore, 2017. "Durable coalitions and communication: Public versus private negotiations," Journal of Public Economics, Elsevier, pages 1-13.

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