Do Coalitions Matter in Designing Institutions?

Ville Korpela, Michele Lombardi and Hannu Vartiainen ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we re-examine the classical questions of implementation theory under complete information in a setting where coalitions are the fundamental behavioral units and the outcomes of their interactions are predicted by applying the solution concept of the core. The planner's exercise consists of designing a code of rights, which specifies the collection of coalitions that have the right to block one outcome by moving to another. A code of individual rights is a code of rights in which only unit coalitions may have blocking powers. We provide necessary and sufficient conditions for implementation (under core equilibria) by codes of rights as well as by codes of individual rights. We show that these two modes of implementation are not equivalent. This result is proven robust and extends to alternative notions of core, such as that of an externally stable core. Therefore, coalitions are shown to bring value added to institutional design. The characterization results address the limitations that restrict the relevance of existing implementation theory.

Keywords: core; implementation; blocking powers (search for similar items in EconPapers)
JEL-codes: C71 D70 (search for similar items in EconPapers)
Date: 2019-01-10
New Economics Papers: this item is included in nep-cdm, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/91474/1/MPRA_paper_91474.pdf original version (application/pdf)

Related works:
Journal Article: Do coalitions matter in designing institutions? (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:91474

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().