Coalition-proof stable networks

Chenghong Luo (), Ana Mauleon and Vincent Vannetelbosch
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Chenghong Luo: UCLouvain

Review of Economic Design, 2022, vol. 26, issue 2, No 3, 185-209

Abstract: Abstract We propose the notion of coalition-proof stability for predicting the networks that could emerge when group deviations are allowed. A network is coalition-proof stable if there exists no coalition which has a credible group deviation. A coalition is said to have a credible group deviation if there is a profitable group deviation to some network and there is no subcoalition of the deviating players which has a subsequent credible group deviation. Coalition-proof stability is a coarsening of strong stability. We emphasize the importance of coalition-proof stability by considering four models where a strongly stable network fails to exist while a coalition-proof stable network does exist. We provide an easy to verify condition for the existence of a coalition-proof stable network while a strongly stable network may not exist. There is no relationship between the set of coalition-proof stable networks and the set of networks induced by a coalition-proof Nash equilibrium of Myerson’s linking game.

Keywords: Networks; Stability; Group deviations; Coalition-proofness; Existence and efficiency; Farsightedness (search for similar items in EconPapers)
JEL-codes: A14 C70 D20 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10058-021-00264-5

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