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Contractually stable networks

Author

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  • Jean-François, CAULIER
  • Ana, MAULEON
  • Vincent, VANNETELBOSCH

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)

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, whre the network specifies the natyure 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 equiibrium 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

  • Jean-François, CAULIER & Ana, MAULEON & Vincent, VANNETELBOSCH, 2008. "Contractually stable networks," Discussion Papers (ECON - Département des Sciences Economiques) 2008045, Université catholique de Louvain, Département des Sciences Economiques.
  • Handle: RePEc:ctl:louvec:2008045
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Jean-François Caulier & Michel Grabisch & Agnieszka Rusinowska, 2013. "An allocation rule for dynamic random network formation processes," Post-Print halshs-00881125, HAL.
    2. 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.
    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. Mauleon, Ana & Roehl, Nils & Vannetelbosch, Vincent, 2018. "Constitutions and groups," Games and Economic Behavior, Elsevier, vol. 107(C), pages 135-152.
    5. Nils Roehl, 2013. "Two-Stage Allocation Rules," Working Papers Dissertations 01, Paderborn University, Faculty of Business Administration and Economics.
    6. repec:gam:jgames:v:8:y:2017:i:3:p:32-:d:106531 is not listed on IDEAS
    7. Nils Roehl, 2013. "Two-Stage Allocation Rules," Working Papers CIE 73, Paderborn University, CIE Center for International Economics.

    More about this item

    Keywords

    Networks; coaliation 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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