A Game-Theoretical Model of the Landscape Theory

Shlomo Weber, Michel Le Breton and Alexander Shapoval

No 14993, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper we examine a game-theoretical generalization of the landscape theory introduced by Axelrod and Bennett (1993). In their two-bloc setting each player ranks the blocs on the basis of the sum of her individual evaluations of members of the group. We extend the Axelrod-Bennett setting by allowing an arbitrary number of blocs and expanding the set of possible deviations to include multi-country gradual deviations. We show that a Pareto optimal landscape equilibrium which is immune to profitable gradual deviations always exists. We also indicate that while a landscape equilibrium is a stronger concept than Nash equilibrium in pure strategies, it is weaker than strong Nash equilibrium.

Keywords: Landscape theory; Landscape equilibrium; Blocs; Gradual deviation; Potential functions; Hedonic games (search for similar items in EconPapers)
JEL-codes: C72 D74 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-gth
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Related works:
Journal Article: A game-theoretical model of the landscape theory (2021)
Working Paper: A Game-theoretical Model of the Landscape Theory (2021)
Working Paper: A Game-Theoretical Model of the Landscape Theory (2020)
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