Coalitions, Agreements and Efficiency
If agents negotiate openly and form coalitions, can they reach efficient agreements? We address this issue within a class of coalition formation games with externalities where agents' preferences depend solely on the coalition structures they are associated with. We derive Ray and Vohra's (1997) notion of equilibrium binding agreements using von Neumann and Morgenstern abstract stable set and then extend it to allow for arbitrary coalitional deviations (as opposed to nested deviations assumed originally). We show that, while the new notion facilitates the attainment of efficient agreements, inefficient agreements can nevertheless arise
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.:
- Barbera, Salvador & Gerber, Anke, 2003.
"On coalition formation: durable coalition structures,"
Mathematical Social Sciences,
Elsevier, vol. 45(2), pages 185-203, April.
- Barbera, Salvador & Gerber, Anke, 2003. "Corrigendum to "On coalition formation: durable coalition structures": [Mathematical Social Sciences 45 (2003) 185-203]," Mathematical Social Sciences, Elsevier, vol. 46(3), pages 355-356, December.
- Effrosyni Diamantoudi & Licun Xue, 2003.
"Farsighted stability in hedonic games,"
Social Choice and Welfare,
Springer;The Society for Social Choice and Welfare, vol. 21(1), pages 39-61, 08.
- Ray, D. & Vohra, R., 1993.
"Equilibrium Binding Agreements,"
21, Boston University - Department of Economics.
- Licun Xue, 1998. "Coalitional stability under perfect foresight," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(3), pages 603-627.
- Debraj Ray & Rajiv Vohra, 1998.
"A Theory of Endogenous Coalition Structures,"
98-1, Brown University, Department of Economics, revised Jan 1998.
- Suryapratim Banerjee & Hideo Konishi & Tayfun Sonmez, 1999.
"Core in a Simple Coalition Formation Game,"
Boston College Working Papers in Economics
449, Boston College Department of Economics.
- Jingang Zhao, 1990.
"The Hybrid Solutions of an n-Person Game,"
Cowles Foundation Discussion Papers
956, Cowles Foundation for Research in Economics, Yale University.
- Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
- Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
- Ray, Debraj, 1989. "Credible Coalitions and the Core," International Journal of Game Theory, Springer;Game Theory Society, vol. 18(2), pages 185-87.
- Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
- Dreze, J H & Greenberg, J, 1980. "Hedonic Coalitions: Optimality and Stability," Econometrica, Econometric Society, vol. 48(4), pages 987-1003, May.
- Yi, Sang-Seung, 1997. "Stable Coalition Structures with Externalities," Games and Economic Behavior, Elsevier, vol. 20(2), pages 201-237, August.
- Bernheim, B. Douglas & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria II. Applications," Journal of Economic Theory, Elsevier, vol. 42(1), pages 13-29, June.
- John C. Harsanyi, 1974. "An Equilibrium-Point Interpretation of Stable Sets and a Proposed Alternative Definition," Management Science, INFORMS, vol. 20(11), pages 1472-1495, July.
- Debraj Ray & Rajiv Vohra, 2001. "Coalitional Power and Public Goods," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1355-1384, December.
- Greenberg, Joseph, 1989. "Deriving strong and coalition-proof nash equilibria from an abstract system," Journal of Economic Theory, Elsevier, vol. 49(1), pages 195-202, October.
- Greenberg, Joseph, 1980. "Beneficial altruism," Journal of Economic Theory, Elsevier, vol. 22(1), pages 12-22, February.
When requesting a correction, please mention this item's handle: RePEc:aah:aarhec:2002-9. 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.