Farsighted Stability in Hedonic Games
We investigate how rational individuals partition themselves into different coalitions in "hedonic games" [see Banerjee, Konishi and S”nmez (1998) and Bogomolnaia and Jackson (2000)], where individuals' preferences depend solely on the composition of the coalition they belong to. We show that the four solution concepts studied in the literature (core, Nash stability, individual stability and contractual individual stability) exhibit myopia on the part of the players. We amend these notions by endowing players with foresight in that they look many steps ahead and consider only credible outcomes. We show the existence and study the properties of the new solutions, as well as their relation to the previous notions.
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.:
- Joseph Farrell and Suzanne Scotchmer., 1986.
Economics Working Papers
8616, University of California at Berkeley.
- Demange, Gabrielle, 1982. "Single-peaked orders on a tree," Mathematical Social Sciences, Elsevier, vol. 3(4), pages 389-396, December.
- Dreze, J H & Greenberg, J, 1980.
"Hedonic Coalitions: Optimality and Stability,"
Econometric Society, vol. 48(4), pages 987-1003, May.
- Tayfun Sönmez & Suryapratim Banerjee & Hideo Konishi, 2001.
"Core in a simple coalition formation game,"
Social Choice and Welfare,
Springer, vol. 18(1), pages 135-153.
- Greenberg, Joseph, 1994. "Coalition structures," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 37, pages 1305-1337 Elsevier.
- Licun Xue, 1998. "Coalitional stability under perfect foresight," Economic Theory, Springer, vol. 11(3), pages 603-627.
- Greenberg Joseph & Weber Shlomo, 1993. "Stable Coalition Structures with a Unidimensional Set of Alternatives," Journal of Economic Theory, Elsevier, vol. 60(1), pages 62-82, June.
- Demange, G., 1991.
"Intermediate Preferences and Stable Coalition Structures,"
DELTA Working Papers
91-16, DELTA (Ecole normale supérieure).
- Demange, Gabrielle, 1994. "Intermediate preferences and stable coalition structures," Journal of Mathematical Economics, Elsevier, vol. 23(1), pages 45-58, January.
- Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-64, July.
When requesting a correction, please mention this item's handle: RePEc:aah:aarhec:2000-12. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.