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Strategy-proof coalition formation

  • Carmelo Rodríguez-Álvarez


We analyze coalition formation problems in which a group of agents is partitioned into coalitions and agents' preferences only depend on the coalition they belong to. We study rules that associate to each profile of agents' preferences a partition of the society. We focus on strategy-proof rules on restricted domains of preferences, as the domains of additively representable or separable preferences. In such domains, the only strategy-proof and individually rational rules that satisfy either Pareto efficiency or non-bossiness and flexibility are single-lapping rules. Single-lapping rules are characterized by severe restrictions on the set of feasible coalitions that are consisitent with hierarchical organizations. These restrictions are necessary and sufficient for the existence of a unique core-stable partition. This fact implies that single-lapping rules always select the associated unique core-stable partition. Thus, our results highlight the relation between the non-cooperative concept of strategy-proofness and the cooperative concept of uniqueness of core-stable partitions.

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Article provided by Springer & Game Theory Society in its journal International Journal of Game Theory.

Volume (Year): 38 (2009)
Issue (Month): 3 (November)
Pages: 431-452

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Handle: RePEc:spr:jogath:v:38:y:2009:i:3:p:431-452
DOI: 10.1007/s00182-009-0162-9
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