On the Computation of Stability in Multiple Coalition Formation Games

M Sáiz (), Eligius Hendrix () and Niels Olieman ()

Computational Economics, 2006, vol. 28, issue 3, 275 pages

Abstract: In non-cooperative models of coalition formation, players have to decide whether or not to participate in a coalition (alliance). Game theoretic analyses of the formation of alliances in games with externalities, stress the difficulties in designing self-enforcing treaties because of free-riding. The presence of a strong free-rider incentive prevents most alliances of being stable and/or effective. This paper focuses on computing stability in a game on multiple coalition formation with membership rules and different transfer schemes. A new mathematical programming notation for game theory concepts is outlined. To compute stability, the new notation is used for implementation into computer coding. Implementation and computation aspects are discussed. Numerical illustration of the algorithm shows that stability varies with the applied membership rules and transfer schemes. An application of coalition formation to International Environmental Agreements (lEAs) is provided. Copyright Springer Science+Business Media, Inc. 2006

Keywords: Environment; Game theory; Coalition formation; Stability; Implementation (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10614-006-9047-1

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