Stationary consistent equilibrium coalition structures constitute the recursive core

Kóczy, Á. László (2015) Stationary consistent equilibrium coalition structures constitute the recursive core. JOURNAL OF MATHEMATICAL ECONOMICS, 61. pp. 104-110. ISSN 0304-4068


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We study coalitional games where the coalitional payoffs depend on the embedding coalition structure. We introduce a noncooperative, sequential coalition formation model and show that the set of equilibrium outcomes coincides with the recursive core, a generalisation of the core to such games. In order to extend past results limited to totally recursive-balanced partition function form games we introduce a more permissive perfectness concept, subgame-consistency that only requires perfectness in selected subgames. Due to the externalities, the profitability of deviations depends on the partition formed by the remaining players: the stability of core payoff configurations is ensured by a combination of the pessimism of players going for certain profits only and the assumption that players base their stationary strategies on a made-up history punishing some of the possible deviators—and getting this sometimes right.

Item Type: Article
Uncontrolled Keywords: Time consistent equilibrium; Stationary perfect equilibrium; Recursive core; IMPLEMENTATION; Externalities; Partition function
Subjects: H Social Sciences / társadalomtudományok > HB Economic Theory / közgazdaságtudomány
Depositing User: MTMT SWORD
Date Deposited: 19 Feb 2016 12:36
Last Modified: 19 Feb 2016 12:36

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