A Theory of Gradual Coalition Formation

Daniel J. Seidmann, Eyal Winter

Research output: Contribution to journalArticlepeer-review

56 Scopus citations

Abstract

We study noncooperative multilateral bargaining games, based on underlying TU games, in which coalitions can renegotiate their agreements. We distinguish between models in which players continue to bargain after implementing agreements ("reversible actions") and models in which players who implement agreements must leave the game ("irreversible actions"). We show that renegotiation always results in formation of the grand coalition if actions are reversible, but that the process may otherwise end with smaller coalitions. On the other hand, we show that the grand coalition cannot form in one step if the core of the game is empty, irrespective of the reversibility of actions.

Original languageAmerican English
Pages (from-to)793-815
Number of pages23
JournalReview of Economic Studies
Volume65
Issue number4
DOIs
StatePublished - 1998

Bibliographical note

Funding Information:
Acknowledgements. We are grateful to two referees and to Hyun Shin for their perceptive and constructive comments. Eyal Winter thanks the German-Israeli Foundation for financial support.

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