Stationary consistent equilibrium coalition structures constitute the recursive core
We study coalitional games where the coalitional payoffs depend on the entire coalition structure. We introduce a noncooperative, sequential coalition formation model and show that the set of equilibrium outcomes coincides with the recursive core, a generalisation of the core to such games. In order to extend past results limited to totally recursive-balanced partition function form games we introduce subgame-consistency that requires perfectness in relevant subgames only, while some unreached subgames are ignored. Due to the externalities, the profitability of deviations depends on the partition formed by the remaining players: the stability of core payoff configurations is ensured by a combination of the pessimism of players going for certain profits only and the assumption that players base their stationary strategies on a made-up history punishing some of the possible deviators -- and getting this sometimes right.
|Date of creation:||Aug 2012|
|Date of revision:|
|Contact details of provider:|| Postal: 1084 Budapest, Tavaszmezö u. 15-17|
Web page: http://www.kgk.uni-obuda.hu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
- Chen-Ying Huang & Tomas Sjöström, 2010. "The Recursive Core for Non-Superadditive Games," Games, MDPI, Open Access Journal, vol. 1(2), pages 66, April.
- Chander, P. & Tulkens, H., .
"A core-theoretic solution for the design of cooperative agreements on transfrontier pollution,"
CORE Discussion Papers RP
1158, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Parkash Chander & Henry Tulkens, 1995. "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," International Tax and Public Finance, Springer, vol. 2(2), pages 279-293, August.
- Chander, Parkash & Tulkens, Henry, 1994. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Working Papers 897, California Institute of Technology, Division of the Humanities and Social Sciences.
- CHANDER, Parkash & TULKENS, Henry, 1994. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," CORE Discussion Papers 1994048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Ray, D. & Vohra, R., 1993.
"Equilibrium Binding Agreements,"
21, Boston University - Department of Economics.
- Eyckmans, Johan & Tulkens, Henry, 2003.
"Simulating coalitionally stable burden sharing agreements for the climate change problem,"
Resource and Energy Economics,
Elsevier, vol. 25(4), pages 299-327, October.
- EYCKMANS, Johan & TULKENS, Henry, 1999. "Simulating coalitionally stable burden sharing agreements for the climate change problem," CORE Discussion Papers 1999026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Fershtman, C., 1988.
"Fixed Rules And Decision Rules: Time Consistency And Subgame Perfection,"
12-88, Tel Aviv.
- Fershtman, Chaim, 1989. "Fixed rules and decision rules : Time consistency and subgame perfection," Economics Letters, Elsevier, vol. 30(3), pages 191-194, September.
- 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.
- Chen Ying Huang & Tomas Sjostrom, 2005. "Implementation of the Recursive Core for Partition Function Form Games," Economics Working Papers 0052, Institute for Advanced Study, School of Social Science.
- 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.
- Kóczy, László Á., 2009. "Sequential coalition formation and the core in the presence of externalities," Games and Economic Behavior, Elsevier, vol. 66(1), pages 559-565, May.
- Kóczy Lászlo Á., 2006. "Sequential Coalition Formation and the Core in the Presence of Externalities," Research Memorandum 047, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Perry, M. & Rany, P., 1992.
"A Non-Cooperative View of Coalition Formation and the Core,"
UWO Department of Economics Working Papers
9203, University of Western Ontario, Department of Economics.
- 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.
- 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.
- Sang-Seung, Yi, 1996. "Endogenous formation of customs unions under imperfect competition: open regionalism is good," Journal of International Economics, Elsevier, vol. 41(1-2), pages 153-177, August.
- Shapley, Lloyd S. & Shubik, Martin, 1969. "On market games," Journal of Economic Theory, Elsevier, vol. 1(1), pages 9-25, June.
- Kalyan Chatterjee & Bhaskar Dutta & Debraj Ray & Kunal Sengupta, 1993. "A Noncooperative Theory of Coalitional Bargaining," Review of Economic Studies, Oxford University Press, vol. 60(2), pages 463-477.
- Yukihiko Funaki & Takehiko Yamato, 1999. "The core of an economy with a common pool resource: A partition function form approach," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(2), pages 157-171.
- Asilis, Carlos M., 1995. "A note on the equivalence of time consistency and subgame perfection in stochastic games," European Economic Review, Elsevier, vol. 39(2), pages 245-251, February.
- Ray, Debraj, 2007. "A Game-Theoretic Perspective on Coalition Formation," OUP Catalogue, Oxford University Press, number 9780199207954, December.
- Francis Bloch, 1995. "Endogenous Structures of Association in Oligopolies," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 537-556, Autumn.
- Muthoo, Abhinay, 1990. "Bargaining without commitment," Games and Economic Behavior, Elsevier, vol. 2(3), pages 291-297, September.
- Kyle Hyndman & Debraj Ray, 2007. "Coalition Formation with Binding Agreements," Review of Economic Studies, Oxford University Press, vol. 74(4), pages 1125-1147.
When requesting a correction, please mention this item's handle: RePEc:pkk:wpaper:1203. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alexandra Vécsey)
If references are entirely missing, you can add them using this form.