TY - JOUR
T1 - A Theory of Endogenous Coalition Structures
AU - Ray, Debraj
AU - Vohra, Rajiv
N1 - Funding Information:
* Preliminary versions of some results contained in this paper were circulated as “Binding Agreements and Coalitional Bargaining” at a workshop on “Endogenous Coalition Formation” that we conducted at Stanford University, July 1995. We thank Paul Milgrom and the participants of that workshop for many valuable comments that have influenced the writing of the current version. We gratefully acknowledge support under National Science Foundation Grants SBR-9414114 (Ray) and SBR-9414142 (Vohra). Partial assistance under Grant PB90-0172 from the Ministerio de Educaci6n y Ciencia, Government of Spain (Ray), and a Fulbright Research Award (Vohra) also supported this research. ’ E-mail: [email protected].
PY - 1999/1
Y1 - 1999/1
N2 - Consider an environment with widespread externalities, and suppose that binding agreements can be written. We study coalition formation in such a setting. Our analysis proceeds by defining on a partition function an extensive-form bargaining game. We establish the existence of a stationary subgame perfect equilibrium for such a game. Our main results are concerned with the characterization of equilibriumcoalition structures. We develop an algorithm that generates (under certain conditions) an equilibrium coalition structure. Our characterization results are especially sharp forsymmetricpartition functions. In particular, we provide a uniqueness theorem and apply our results to a Cournot oligopoly.Journal of Economic LiteratureClassification Numbers: C71, C72, C78, D62.
AB - Consider an environment with widespread externalities, and suppose that binding agreements can be written. We study coalition formation in such a setting. Our analysis proceeds by defining on a partition function an extensive-form bargaining game. We establish the existence of a stationary subgame perfect equilibrium for such a game. Our main results are concerned with the characterization of equilibriumcoalition structures. We develop an algorithm that generates (under certain conditions) an equilibrium coalition structure. Our characterization results are especially sharp forsymmetricpartition functions. In particular, we provide a uniqueness theorem and apply our results to a Cournot oligopoly.Journal of Economic LiteratureClassification Numbers: C71, C72, C78, D62.
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U2 - 10.1006/game.1998.0648
DO - 10.1006/game.1998.0648
M3 - Article
AN - SCOPUS:0002351655
SN - 0899-8256
VL - 26
SP - 286
EP - 336
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 2
ER -