Coalition formation problems with externalities

María Haydée Fonseca-Mairena and Matteo Triossi

Economics Letters, 2023, vol. 226, issue C

Abstract: We study coalition formation problems with externalities. We prove that, if expectations are not prudent a stable coalitions structure may fail to exist. Under prudent expectations a stable and efficient coalition structure exists if the set of admissible coalitions is single-lapping. However, under this assumption the stable set is not a singleton, and no stable strategy-proof revelation mechanism exists, differently from the case without externalities. Finally, the stable correspondence is Nash implementable.

Keywords: Coalition formation problems; Externalities; Stability; Efficiency (search for similar items in EconPapers)
JEL-codes: C71 C72 C78 D62 D78 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:226:y:2023:i:c:s0165176523001374

DOI: 10.1016/j.econlet.2023.111112

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