Farsighted Coalitional Stability

Michael Suk-Young Chwe
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Michael Suk-Young Chwe: University of Chicago, Department of Economic, Postal: 1126 East 59th Street, Chicago, Illinois 60637 USA

Working Papers from University of Chicago, Department of Economics

Abstract: I define the largest consistent set, a solution concept which applies to situations in which coalitions freely form but cannot make binding contracts, act publicly, and are fully ``farsighted'' in that a coalition considers the possibility that once it acts, another coalition might react, a third coalition might in turn react, and so on, without limit. I establish weak nonemptiness conditions and apply it to strategic and coalitional form games and majority rule voting. I argue that it improves on the von Neumann- Morgenstern stable set as it is usually defined but is consistent with a generalization of the stable set as in the theory of social situations.

Keywords: farsighted; coalition (search for similar items in EconPapers)
JEL-codes: C70 C71 (search for similar items in EconPapers)
Date: 1993-05
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