Gradual Coalition Formation in Games With Externalities

• Autores: Christian Kjaer
• Localización: Abstracts of the Fifth Spanish Meeting on Game Theory and Applications / coord. por Jesús Mario Bilbao Arrese , Francisco Ramón Fernández García , 2002, ISBN 84-472-0733-1, pág. 3
• Idioma: inglés
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• Resumen

  • I study a non-cooperative multilateral bargaining game of coalition formation, based on underlying TU games in partition form, in which coalitions are allowed to renegotiate agreements. Special attention is given to the strategic considerations induced by the possibility of renegotiation and its consequences for the efficiency of bargaining. In negative externality games, I find that renegotiation promotes the strategic formation of subcoalitions. On the contrary, in positive externality games, renegotiation promotes efficiency by motivating players to form the grand coalition immediately. Thus, the possibility of renegotiation has very different strategic effects in the bargaining game depending on characteristics of the underlying game.