Coalitional Stability in a Class of Social Interactions Games

Hideo Konishi, Michel Le Breton () and Shlomo Weber ()
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Michel Le Breton: Toulouse School of Economics, Toulouse Capitole University
Shlomo Weber: Southern Methodist University

No 1120, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: In this paper, we define additive dyadic social interactions games (ADG), in which each player cares not only about the selected action, but also about interactions with other players, especially those who choose the same action. This class of games includes alliance formation games, network games, and discrete choice problems with network externalities. While it is known that games in the ADG class admit a pure strategy Nash equilibrium that is a maximizer of the game's potential, the potential approach does not always apply if all coalitional deviations are allowed. We then introduce a novel notion of a strong landscape equilibrium, which relies on a limited scope of coalitional deviations. We show the existence of a strong landscape equilibrium for a class of basic additive dyadic social interactions games (BADG), even though a strong Nash equilibrium may fail to exist. Somewhat surprisingly, a potential-maximizing strong landscape equilibrium is not always a strong Nash equilibrium even if the set of the latter is nonempty. We also provide applications and extensions of our results.

Keywords: Social Interactions Game; Potential Function; Coalition Formation; Strong Nash Equilibrium; Strong Landscape Equilibrium (search for similar items in EconPapers)
JEL-codes: C71 C72 C78 (search for similar items in EconPapers)
Pages: 30pages
Date: 2025-10
New Economics Papers: this item is included in nep-des, nep-evo, nep-gth, nep-mic and nep-net
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Working Paper: Coalitional Stability in a Class of Social Interactions Games (2025)
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