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The Gamma-Core and Coalition Formation

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  • Parkash Chander

Abstract

This paper reinterprets the 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

  • Parkash Chander, 2004. "The Gamma-Core and Coalition Formation," Econometric Society 2004 North American Summer Meetings 108, Econometric Society.
    • Handle: RePEc:ecm:nasm04:108
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    References listed on IDEAS

    as
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    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.
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    More about this item

    Keywords

    strategic games; coalition formation; farsighted; core; characteristic function;
    All these keywords.

    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

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