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Stable and efficient coalitional networks

Jean-François Caulier (), Ana Mauleon (), José Sempere-Monerris () and Vincent Vannetelbosch ()

Review of Economic Design, 2013, vol. 17, issue 4, 249-271

Abstract: We develop a theoretical framework that allows us to study which bilateral links and coalition structures are going to emerge at equilibrium. We define the notion of coalitional network to represent a network and a coalition structure, where the network specifies the nature of the relationship each individual has with her coalition members and with individuals outside her coalition. To predict the coalitional networks that are going to emerge at equilibrium we propose the concepts of strong stability and of contractual stability. Contractual stability imposes that any change made to the coalitional network needs the consent of both the deviating players and their original coalition partners. Requiring the consent of coalition members under the simple majority or unanimity decision rule may help to reconcile stability and efficiency. Moreover, this new framework can provide insights that one cannot obtain if coalition formation and network formation are tackled separately and independently. Copyright Springer-Verlag 2013

Keywords: Networks; Coalition structures; Stability; Efficiency; A14; C70 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Stable and efficient coalitional networks (2013)
Working Paper: Stable and efficient coalitional networks (2013)
Working Paper: Stable and efficient coalitional networks (2013)
Working Paper: Stable and efficient coalitional networks (2011) Downloads
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DOI: 10.1007/s10058-012-0132-8

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