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Information Design In Coalition Formation Games

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  • Sareh Vosooghi

    (University of Oxford)

Abstract

I examine a setting, where an information sender conducts research into a payoff-relevant state variable, and releases information to agents, who consider joining a coalition. The agents' actions can cause harm by contributing to a public bad. The sender, who has commitment power, by designing an information mechanism (a set of signals and a probability distribution over them), maximises his payoff, which depends on the action taken by the agents, and the state variable. I show that the coalition size, as a function of beliefs of agents, is an endogenous variable, induced by the information sender. The optimal information mechanism from the general set of public information mechanisms, in coalition formation games is derived. I also apply the results to International Environmental Agreements (IEAs), where a central authority, as an information sender, attempts to reduce the global level of greenhouse gases (GHG) by communication of information on social cost of GHG.

Suggested Citation

  • Sareh Vosooghi, 2017. "Information Design In Coalition Formation Games," Working Papers 2017.28, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2017.28
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    References listed on IDEAS

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    More about this item

    Keywords

    Coalition Formation; Learning; Information Persuasion; International Environmental Agreements;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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