IDEAS home Printed from https://ideas.repec.org/p/cor/louvco/2003046.html
   My bibliography  Save this paper

The [gamma]-core and coalition formation

Author

Listed:
  • CHANDER, Parkash

Abstract

This paper reinterprets by [gamma]-core (Chander and Tulkens (1995, 1997)) and justifies it as well as its prediction that the efficient coalition structure is stable in terms of the coalition formation theory. It is assumed that coalitions can freely merge or break apart, are farsighted (that is, it is the final and not the immediate payoffs that matter to the coalitions)and a coalition may deviate if and only if it stands to gain from it. It is then shown that subsequent to a deviation by a coalition, the nonmembers will have incentives to break apart into singletons, as is assumed in the definition of the [gamma]-characteristic function, and that the grand coalition is the only stable coalition structure.

Suggested Citation

  • CHANDER, Parkash, 2003. "The [gamma]-core and coalition formation," CORE Discussion Papers 2003046, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2003046
    as

    Download full text from publisher

    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-2003.html
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. TULKENS, Henry, 1997. "Cooperation vs. free riding in international environmental affairs: two approaches," CORE Discussion Papers 1997052, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Parkash Chander, 1998. "International Treaties on Global Pollution: A Dynamic Time-Path Analysis," Economics Working Paper Archive 400, The Johns Hopkins University,Department of Economics.
    3. Joseph Farrell & Garth Saloner, 1988. "Coordination through Committees and Markets," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 235-252, Summer.
    4. Parkash Chander & Henry Tulkens, 1995. "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 279-293, August.
    5. Chander, Parkash, 1993. "Dynamic Procedures and Incentives in Public Good Economies," Econometrica, Econometric Society, vol. 61(6), pages 1341-1354, November.
    6. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    7. Ray, Debraj & Vohra, Rajiv, 1997. "Equilibrium Binding Agreements," Journal of Economic Theory, Elsevier, vol. 73(1), pages 30-78, March.
    8. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 26(3), pages 379-401.
    9. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    10. Ray, Debraj & Vohra, Rajiv, 1999. "A Theory of Endogenous Coalition Structures," Games and Economic Behavior, Elsevier, vol. 26(2), pages 286-336, January.
    11. Scarf, Herbert E., 1971. "On the existence of a coopertive solution for a general class of N-person games," Journal of Economic Theory, Elsevier, vol. 3(2), pages 169-181, June.
    12. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-1064, July.
    13. Chwe Michael Suk-Young, 1994. "Farsighted Coalitional Stability," Journal of Economic Theory, Elsevier, vol. 63(2), pages 299-325, August.
    14. 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.
    15. Moulin, Herve, 1987. "Egalitarian-Equivalent Cost Sharing of a Public Good," Econometrica, Econometric Society, vol. 55(4), pages 963-976, July.
    16. Foley, Duncan K, 1970. "Lindahl's Solution and the Core of an Economy with Public Goods," Econometrica, Econometric Society, vol. 38(1), pages 66-72, January.
    17. Diamantoudi, Effrosyni & Xue, Licun, 2007. "Coalitions, agreements and efficiency," Journal of Economic Theory, Elsevier, vol. 136(1), pages 105-125, September.
    18. Yi, Sang-Seung, 1997. "Stable Coalition Structures with Externalities," Games and Economic Behavior, Elsevier, vol. 20(2), pages 201-237, August.
    19. Roberts, Donald John, 1974. "The Lindahl solution for economies with public goods," Journal of Public Economics, Elsevier, vol. 3(1), pages 23-42, February.
    20. Belleflamme, Paul, 2000. "Stable Coalition Structures with Open Membership and Asymmetric Firms," Games and Economic Behavior, Elsevier, vol. 30(1), pages 1-21, January.
    21. Carsten Helm, 2001. "On the existence of a cooperative solution for a coalitional game with externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(1), pages 141-146.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Effrosyni Diamantoudi & Eftichios S. Sartzetakis, "undated". "International Environmental Agreements -The Role of Foresight," Economics Working Papers 2002-10, Department of Economics and Business Economics, Aarhus University.
    2. Kumoi, Yuki & Matsubayashi, Nobuo, 2014. "Vertical integration with endogenous contract leadership: Stability and fair profit allocation," European Journal of Operational Research, Elsevier, vol. 238(1), pages 221-232.
    3. Ray, Debraj & Vohra, Rajiv, 2015. "Coalition Formation," Handbook of Game Theory with Economic Applications, Elsevier.
    4. Bjart Holtsmark, 2013. "International cooperation on climate change: why is there so little progress?," Chapters,in: Handbook on Energy and Climate Change, chapter 13, pages 327-343 Edward Elgar Publishing.
    5. Debraj Ray & Rajiv Vohra, 2013. "Coalition Formation," Working Papers 2013-1, Brown University, Department of Economics.
    6. Dritan Osmani & Richard S.J. Tol, 2008. "Evolution in time of Farsightedly Stable Coalitions: An Application of FUND," Working Papers FNU-162, Research unit Sustainability and Global Change, Hamburg University, revised May 2008.
    7. Zahur, Nahim Bin, 2014. "Farsighted Fuzzy Coalitions in an Economy with Multilateral Negative Externalities," 2014 Conference (58th), February 4-7, 2014, Port Maquarie, Australia 165807, Australian Agricultural and Resource Economics Society.
    8. Calvo, Emilio & Rubio, Santiago J., 2013. "Dynamic Models of International Environmental Agreements: A Differential Game Approach," International Review of Environmental and Resource Economics, now publishers, vol. 6(4), pages 289-339, April.
    9. Dritan Osmani, "undated". "A note on optimal transfer schemes, stable coalition for environmental protection and joint maximization assumption," Working Papers FNU-176, Research unit Sustainability and Global Change, Hamburg University.
    10. Pedro Pintassilgo & Lone Kronbak & Marko Lindroos, 2015. "International Fisheries Agreements: A Game Theoretical Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 689-709, December.
    11. repec:eee:jeeman:v:84:y:2017:i:c:p:173-188 is not listed on IDEAS
    12. Effrosyni Diamantoudi & Eftichios Sartzetakis, 2015. "International environmental agreements: coordinated action under foresight," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(3), pages 527-546, August.
    13. Dritan Osmani & Richard Tol, 2009. "Toward Farsightedly Stable International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(3), pages 455-492, June.
    14. Parkash Chander & Myrna Wooders, 2016. "The Subgame Perfect Core," Vanderbilt University Department of Economics Working Papers 16-00006, Vanderbilt University Department of Economics.
    15. Rabia Nessah & Kristiaan Kerstens, 2008. "Characterizations of the Existence of Nash Equilibria with Non-convex Strategy Sets," Working Papers 2008-ECO-13, IESEG School of Management.
    16. Fuentes-Albero, Cristina & Rubio, Santiago J., 2010. "Can international environmental cooperation be bought?," European Journal of Operational Research, Elsevier, vol. 202(1), pages 255-264, April.
    17. Olivier Bos & Béatrice Roussillon & Paul Schweinzer, 2016. "Agreeing on Efficient Emissions Reduction," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(4), pages 785-815, October.
    18. Brennan Platt, 2009. "Spoilers, blocking coalitions, and the core," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(3), pages 361-381, September.
    19. repec:aen:journl:ej38-4-kersting is not listed on IDEAS
    20. CHANDER, Parkash & TULKENS, Henry, 2011. "The kyoto Protocol, the Copenhagen Accord, the Cancun Agreements, and beyond: an economic and game theoretical exploration and interpretation," CORE Discussion Papers 2011051, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    21. Parkash Chander & Myrna Wooders, 2010. "Subgame Perfect Cooperation in an Extensive Game," Vanderbilt University Department of Economics Working Papers 1008, Vanderbilt University Department of Economics.
    22. Beard, Rodney & Mallawaarachchi, Thilak, 2011. "Are international environmental agreements stable ex-post?," MPRA Paper 34303, University Library of Munich, Germany.
    23. Reddy, Puduru V. & Zaccour, Georges, 2016. "A friendly computable characteristic function," Mathematical Social Sciences, Elsevier, vol. 82(C), pages 18-25.
    24. Odd Godal & Bjart Holtsmark, 2010. "International emissions trading with endogenous taxes," Discussion Papers 626, Statistics Norway, Research Department.

    More about this item

    Keywords

    core; characteristic function; strategic games; coalition formation;

    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
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2003046. 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: (Alain GILLIS). General contact details of provider: http://edirc.repec.org/data/coreebe.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.