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Using The Aspiration Core To Predict Coalition Formation

Author

Listed:
  • CAMELIA BEJAN

    (Department of Economics, Rice University, 6100 Main Street, Houston, TX 77005, USA)

  • JUAN CAMILO GÓMEZ

    (Business Program, University of Washington Bothell, 18115 Campus Way NE, Bothell, WA 98011, USA)

Abstract

This work uses the defining principles of the core solution concept to determine not only payoffs but also coalition formation. Given a cooperative transferable utility (TU) game, we propose two noncooperative procedures that in equilibrium deliver a natural and nonempty core extension, the aspiration core, together with the supporting coalitions it implies. As expected, if the cooperative game is balanced, the grand coalition forms. However, if the core is empty, other coalitions arise. Following the aspiration literature, not only partitions but also overlapping coalition configurations are allowed. Our procedures interpret this fact in different ways. The first game allows players to participate with a fraction of their time in more than one coalition, while the second assigns probabilities to the formation of potentially overlapping coalitions. We use the strong Nash and subgame perfect Nash equilibrium concepts.

Suggested Citation

  • Camelia Bejan & Juan Camilo Gómez, 2012. "Using The Aspiration Core To Predict Coalition Formation," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 1-13.
    • Handle: RePEc:wsi:igtrxx:v:14:y:2012:i:01:n:s0219198912500041
    DOI: 10.1142/S0219198912500041
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    Citations

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    Cited by:

    1. Stéphane Gonzalez & Michel Grabisch, 2015. "Autonomous coalitions," Annals of Operations Research, Springer, vol. 235(1), pages 301-317, December.
    2. Gonzalez, Stéphane & Grabisch, Michel, 2016. "Multicoalitional solutions," Journal of Mathematical Economics, Elsevier, vol. 64(C), pages 1-10.
    3. Michel Grabisch & Peter Sudhölter, 2020. "Characterization of TU games with stable cores by nested balancedness," Documents de travail du Centre d'Economie de la Sorbonne 20009, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

    More about this item

    Keywords

    Nonempty core extension; strategic coalition formation; aspiration core; C71; C72;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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