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Contractually stable networks

Author

Listed:
  • Jean-François Caulier

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • A. Mauleon

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain)

  • Vincent Vannetelbosch

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain)

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 speciÖes 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 e¢ ciency.

Suggested Citation

  • Jean-François Caulier & A. Mauleon & Vincent Vannetelbosch, 2013. "Contractually stable networks," Post-Print hal-00633611, HAL.
  • Handle: RePEc:hal:journl:hal-00633611
    DOI: 10.1007/s00182-012-0356-4
    Note: View the original document on HAL open archive server: https://hal.science/hal-00633611
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    Cited by:

    1. 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.
    2. Caulier, Jean-François & Mauleon, Ana & Vannetelbosch, Vincent, 2015. "Allocation rules for coalitional network games," Mathematical Social Sciences, Elsevier, vol. 78(C), pages 80-88.
    3. Mauleon, Ana & Roehl, Nils & Vannetelbosch, Vincent, 2019. "Paths to stability for overlapping group structures," Journal of Mathematical Economics, Elsevier, vol. 83(C), pages 19-24.
    4. Ana Mauleon & Jose J. Sempere-Monerris & Vincent Vannetelbosch, 2023. "Limited Farsightedness in R &D Network Formation," Dynamic Games and Applications, Springer, vol. 13(2), pages 549-565, June.
    5. Nils Roehl, 2013. "Two-Stage Allocation Rules," Working Papers CIE 73, Paderborn University, CIE Center for International Economics.
    6. de Callatay, Pierre & Mauleon, Ana & Vannetelbosch, Vincent, 2023. "Local Farsightedness in Network Formation," LIDAM Discussion Papers CORE 2023003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. Pierre de Callataÿ & Ana Mauleon & Vincent Vannetelbosch, 2024. "Local farsightedness in network formation," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(2), pages 199-226, June.
    8. Mauleon, Ana & Roehl, Nils & Vannetelbosch, Vincent, 2018. "Constitutions and groups," Games and Economic Behavior, Elsevier, vol. 107(C), pages 135-152.
    9. Chenghong Luo & Ana Mauleon & Vincent Vannetelbosch, 2022. "Coalition-proof stable networks," Review of Economic Design, Springer;Society for Economic Design, vol. 26(2), pages 185-209, June.
    10. Nils Roehl, 2013. "Two-Stage Allocation Rules," Working Papers Dissertations 01, Paderborn University, Faculty of Business Administration and Economics.
    11. Antoni Rubí-Barceló, 2017. "Structural Holes in Social Networks with Exogenous Cliques," Games, MDPI, vol. 8(3), pages 1-13, August.
    12. de Callatay, Pierre & Mauleon, Ana & Vannetelbosch, Vincent, 2021. "Minimally Farsighted Unstable Networks," LIDAM Discussion Papers CORE 2021012, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    13. Dollinger, Jérôme & Mauleon, Ana & Vannetelbosch, Vincent, 2023. "R&D and Market Sharing Agreements," LIDAM Discussion Papers CORE 2023004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    14. Ping Sun & Elena Parilina, 2022. "Impact of Utilities on the Structures of Stable Networks with Ordered Group Partitioning," Dynamic Games and Applications, Springer, vol. 12(4), pages 1131-1162, December.
    15. Safi, Shahir, 2022. "Listen before you link: Optimal monitoring rules for communication networks," Games and Economic Behavior, Elsevier, vol. 133(C), pages 230-247.

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    More about this item

    Keywords

    Networks; Coalition Structures; Contractual Stability; Allocation Rules Networks; Strong efficiency;
    All these keywords.

    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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