Coalition Formation in Games without Synergies

Marco Marini () and Sergio Currarini ()

No 2004.43, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper establishes sufficient conditions for the existence of a stable coalition structure in the ”coalition unanimity” game of coalition formation, first defined by Hart and Kurz (1983) and more recently studied by Yi (1997, 2000). Our conditions are defined on the strategic form game used to derive the payoffs the game of coalition formation. We show that if no synergies are generated by the formation of coalitions, a stable coalition structure always exists provided that players are symmetric and either the game exhibits strategic complementarity or, if strategies are substitutes, the best reply functions are contractions. We illustrate the role of synergies in a Cournot oligopoly example with cost reducing R&D.

Keywords: Coalition formation; Synergies; Strong Nash equilibrium (search for similar items in EconPapers)
JEL-codes: C7 (search for similar items in EconPapers)
Date: 2004-03
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Related works:
Journal Article: COALITION FORMATION IN GAMES WITHOUT SYNERGIES (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:fem:femwpa:2004.43

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