Farsightedness and Cautiousness in Coalition Formation
Preprint
- 1 June 2003
- preprint
- Published by Elsevier in SSRN Electronic Journal
Abstract
We adopt the largest consistent set defined by Chwe [J. of Econ. Theory 63 (1994), 299-235] to predict which coalition structures are possibly stable when players are farsighted. We also introduce a refinement, the largest cautious consistent set, based on the assumption that players are cautious. For games with positive spillovers, many coalition structures may belong to the largest consistent set. The grand coalition, which is the efficient coalition structure, always belongs to the largest consistent set and is the unique one to belong to the largest cautious consistent set.Keywords
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This publication has 3 references indexed in Scilit:
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- Stable CoalitionsSSRN Electronic Journal, 2002
- Stable International Environmental Agreements: An Analytical ApproachSSRN Electronic Journal, 2001