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Strategy-Proof Coalition Formation

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Abstract

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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  • Carmelo Rodríguez Álvarez, 2006. "Strategy-Proof Coalition Formation," Economic Working Papers at Centro de Estudios Andaluces E2006/11, Centro de Estudios Andaluces.
    • Handle: RePEc:cea:doctra:e2006_11
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    More about this item

    Keywords

    Coalition Formation; Strategy-Proofness; Single-Lapping Property; Core-Stability; Matching Problems.;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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