Coalition-proof stable networks

Chenghong Luo, Ana Mauleon and Vincent Vannetelbosch
Additional contact information
Chenghong Luo: Ca’ Foscari University of Venice
Vincent Vannetelbosch: Université catholique de Louvain, LIDAM/CORE, Belgium

No 3207, LIDAM Reprints CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

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)
Pages: 25
Date: 2022-01-01
Note: In: Review of Economic Design, 2022, vol. 26, p. 185-209
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Journal Article: Coalition-proof stable networks (2022)
Working Paper: Coalition-proof stable networks (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvrp:3207

DOI: 10.1007/s10058-021-00264-5

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