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Coalitional Stability in a Class of Social Interactions Games

Author

Listed:
  • Hideo Konishi

    (Boston College)

  • Michel Le Breton

    (Toulouse School of Economics)

  • Shlomo Weber

    (Southern Methodist University)

Abstract

In this paper, we define additive dyadic social interactions games (ADG), in which each player cares not only about the selected action, but also about interactions with other players, especially those who choose the same action. This class of games includes alliance formation games, network games, and dis- crete choice problems with network externalities. While it is known that games in the ADG class admit a pure strategy Nash equilibrium that is a maximizer of the game's potential, the potential approach does not always apply if all coalitional deviations are allowed. We then introduce a novel notion of a strong landscape equilibrium, which relies on a limited scope of coalitional deviations. We show the existence of a strong landscape equilibrium for a class of basic additive dyadic social interactions games (BADG), even though a strong Nash equilibrium may fail to exist. Somewhat surprisingly, a potential-maximizing strong landscape equilibrium is not always a strong Nash equilibrium even if the set of the latter is nonempty. We also provide applications and extensions of our results.

Suggested Citation

  • Hideo Konishi & Michel Le Breton & Shlomo Weber, 2025. "Coalitional Stability in a Class of Social Interactions Games," Boston College Working Papers in Economics 1098, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:1098
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    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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