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Contractually stable networks

Author

Listed:
  • CAULIER, Jean-François
  • MAULEON, Ana

    (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))

  • VANNETELBOSCH, Vincent

    (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))

Abstract

We develop a theoretical framework that allows us to study which bilateral links and coalition structures are going to emerge at equilibrium. We define the notion of coalitional network to represent a network and a coalition structure, where the network specifies the nature of the relationship each individual has with his coalition members and with individuals outside his coalition. To predict the coalitional networks that are going to emerge at equilibrium we propose the concept of contractual stability which requires that any change made to the coalitional network needs the consent of both the deviating players and their original coalition partners. We show that there always exists a contractually stable coalitional network under the simple majority decision rule and the component-wise egalitarian or majoritarian allocation rules. Moreover, requiring the consent of group members may help to reconcile stability and efficiency.

Suggested Citation

  • CAULIER, Jean-François & MAULEON, Ana & VANNETELBOSCH, Vincent, 2008. "Contractually stable networks," CORE Discussion Papers 2008066, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2008066
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    References listed on IDEAS

    as
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    1. repec:hal:journl:halshs-00881125 is not listed on IDEAS
    2. repec:eee:gamebe:v:107:y:2018:i:c:p:135-152 is not listed on IDEAS
    3. Caulier, Jean-François & Mauleon, Ana & Vannetelbosch, Vincent, 2015. "Allocation rules for coalitional network games," Mathematical Social Sciences, Elsevier, vol. 78(C), pages 80-88.
    4. Jean-François Caulier & Michel Grabisch & Agnieszka Rusinowska, 2015. "An allocation rule for dynamic random network formation processes," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 60(2), pages 283-313, October.
    5. Mauleon, Ana & Roehl, Nils & Vannetelbosch, Vincent, 2018. "Constitutions and groups," Games and Economic Behavior, Elsevier, vol. 107(C), pages 135-152.
    6. Nils Roehl, 2013. "Two-Stage Allocation Rules," Working Papers CIE 73, Paderborn University, CIE Center for International Economics.
    7. Nils Roehl, 2013. "Two-Stage Allocation Rules," Working Papers Dissertations 01, Paderborn University, Faculty of Business Administration and Economics.
    8. repec:gam:jgames:v:8:y:2017:i:3:p:32-:d:106531 is not listed on IDEAS

    More about this item

    Keywords

    networks; coalition structures; contractual stability; allocation rules.;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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