On coalitional stability of anonymous interim mechanisms

Gabrielle Demange and Roger Guesnerie ()

Economic Theory, 2001, vol. 18, issue 2, 367-389

Abstract: In a situation where agents have private information, we investigate the stability of mechanisms with respect to coalitional deviations. In the cooperative tradition, we first extend the notion of Core, taking into account the information a coalition may have when it forms and the conjectures of outsiders. This leads us to propose a family of Cores rather than a single one. Secondly, we study the stability of Core mechanisms to secession proposals in simple noncooperative games. The two different stability analyses, normative and strategic, tend to give support to the more natural extension of the Core, called Statistical Core, only in situations where some strong form of increasing returns to coalition is met. Without this property, arguments for a concept of Core that is non empty in a reasonably large class of problems are less compelling. Applications to taxation and insurance are given.

Keywords: Core; Incentive mechanism. (search for similar items in EconPapers)
JEL-codes: C71 D82 (search for similar items in EconPapers)
Date: 2001-05-08
Note: Received: September 6, 1999; revised version: December 3, 1999
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Citations: View citations in EconPapers (7)

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