Coalition Formation

Debraj Ray, Rajiv Vohra

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    This chapter surveys a sizable and growing literature on coalition formation. We refer to theories in which one or more groups of agents ("coalitions") deliberately get together to jointly determine within-group actions, while interacting noncooperatively across groups. The chapter describes a variety of solution concepts, using an umbrella model that adopts an explicit real-time approach. Players band together, perhaps disband later and re-form in shifting alliances, all the while receiving payoffs at each date according to the coalition structure prevailing at the time. We use this model to nest two broad approaches to coalition formation, one based on cooperative game theory, the other based on noncooperative bargaining. Three themes that receive explicit emphasis are agent farsightedness, the description of equilibrium coalition structures, and the efficiency implications of the various theories.

    Original languageEnglish (US)
    Title of host publicationHandbook of Game Theory with Economic Applications
    PublisherElsevier B.V.
    Pages239-326
    Number of pages88
    Edition1
    DOIs
    StatePublished - 2015

    Publication series

    NameHandbook of Game Theory with Economic Applications
    Number1
    Volume4
    ISSN (Print)1574-0005

    Keywords

    • Bargaining
    • Blocking
    • Coalition formation
    • Coalition structures
    • Core
    • Farsightedness
    • Stable set

    ASJC Scopus subject areas

    • Statistics and Probability
    • Economics and Econometrics
    • Statistics, Probability and Uncertainty
    • Applied Mathematics

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  • Cite this

    Ray, D., & Vohra, R. (2015). Coalition Formation. In Handbook of Game Theory with Economic Applications (1 ed., pp. 239-326). (Handbook of Game Theory with Economic Applications; Vol. 4, No. 1). Elsevier B.V.. https://doi.org/10.1016/B978-0-444-53766-9.00005-7