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Home > A Non-cooperative Foundation of Core-Stability in Positive Externality NTU-Coalition Games

A Non-cooperative Foundation of Core-Stability in Positive Externality NTU-Coalition Games

Working paper
Author/s: 
Michael Finus and Bianca Rundshagen
Issue number: 
2003.031
Publisher: 
FEEM
Year: 
2003
PDF [1]
We identify the core as an appealing stability concept of cooperative game theory, but argue that the non-cooperative approach has conceptual advantages in the context of economic problems with externalities. Therefore, we derive a non-cooperative foundation of core-stability for positive externality NTU-games. First, in the spirit of Hart/Kurz (1983), we develop a game that we call Η-game and show that strong Nash equilibria coalition structures in this game are identical to α- and β-core stable coalition structures. Second, as a by-product of the definition of the Η-game, we develop an extension called an Ι-game. Finally, we compare equilibria in the Η- and Ι-game with those in the ∆- and Γ-game of Hart and Kurz (1983).
Tags: 
Coalition Formation Theory [2]

Source URL:http://coalitiontheory.net/content/non-cooperative-foundation-core-stability-positive-externality-ntu-coalition-games

Links
[1] http://www.feem.it/userfiles/attach/Publication/NDL2003/NDL2003-031.pdf [2] http://coalitiontheory.net/research-areas/coalition-formation-theory