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Sequential coalition formation and the core in the presence of externalities

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  • László Á. Kóczy

    (Budapest Tech)

Abstract

The sequential coalition formation model of Bloch (1996) to solve cooperative games with externalities exhibits some anomalies when related to classical concepts. We elaborate on these problems, define a modification of Bloch's model and show that its order-independent equilibria coincide with the (pessimistic) recursive core.

Suggested Citation

  • László Á. Kóczy, 2006. "Sequential coalition formation and the core in the presence of externalities," Working Paper Series 0801, Óbuda University, Keleti Faculty of Business and Management, revised Apr 2008.
    • Handle: RePEc:pkk:wpaper:0801
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    File URL: http://uni-obuda.hu/users/vecseya/RePEc/pkk/wpaper/0801.pdf
    File Function: Author's Accepted Manuscript, 2008
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    References listed on IDEAS

    as
    1. Perry, Motty & Reny, Philip J, 1994. "A Noncooperative View of Coalition Formation and the Core," Econometrica, Econometric Society, vol. 62(4), pages 795-817, July.
    2. Lagunoff Roger D., 1994. "A Simple Noncooperative Core Story," Games and Economic Behavior, Elsevier, vol. 7(1), pages 54-61, July.
    3. Huang, Chen-Ying & Sjostrom, Tomas, 2006. "Implementation of the recursive core for partition function form games," Journal of Mathematical Economics, Elsevier, vol. 42(6), pages 771-793, September.
    4. Kalyan Chatterjee & Bhaskar Dutia & Debraj Ray & Kunal Sengupta, 2013. "A Noncooperative Theory of Coalitional Bargaining," World Scientific Book Chapters, in: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining, chapter 5, pages 97-111, World Scientific Publishing Co. Pte. Ltd..
    5. László Kóczy, 2007. "A recursive core for partition function form games," Theory and Decision, Springer, vol. 63(1), pages 41-51, August.
    6. Huang, Chen-Ying & Sjostrom, Tomas, 2003. "Consistent solutions for cooperative games with externalities," Games and Economic Behavior, Elsevier, vol. 43(2), pages 196-213, May.
    7. Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
    8. Moldovanu Benny & Winter Eyal, 1995. "Order Independent Equilibria," Games and Economic Behavior, Elsevier, vol. 9(1), pages 21-34, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dávid Csercsik & László Á. Kóczy, 2017. "Efficiency and Stability in Electrical Power Transmission Networks: a Partition Function Form Approach," Networks and Spatial Economics, Springer, vol. 17(4), pages 1161-1184, December.
    2. Kóczy, LászlóÁ., 2015. "Stationary consistent equilibrium coalition structures constitute the recursive core," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 104-110.
    3. Dávid Csercsik & Balázs Sziklai, 2015. "Traffic routing oligopoly," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(4), pages 743-762, December.
    4. László Á. Kóczy, 2018. "Partition Function Form Games," Theory and Decision Library C, Springer, number 978-3-319-69841-0, December.
    5. Chen-Ying Huang & Tomas Sjöström, 2010. "The Recursive Core for Non-Superadditive Games," Games, MDPI, Open Access Journal, vol. 1(2), pages 1-23, April.
    6. Okada, Akira, 2010. "The Nash bargaining solution in general n-person cooperative games," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2356-2379, November.
    7. Kóczy, L.Á., 2008. "Stationary quasi-perfect equilibrium partitions constitute the recursive core," Research Memorandum 028, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    8. László Á. Kóczy & Dávid Csercsik, 2011. "Externalities in the games over electrical power transmission networks," Working Paper Series 1103, Óbuda University, Keleti Faculty of Business and Management.
    9. Lech Krus, 2009. "Cost allocation in partition functionform games," Operations Research and Decisions, Wroclaw University of Science Technology, Faculty of Management, vol. 2, pages 39-49.

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    More about this item

    Keywords

    Core; externalities; sequential coalition formation; order-independent equilibria;
    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

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