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Sequential coalition formation and the core in the presence of externalities

By László Á. Kóczy


The sequential coalition formation model of Bloch (1996) to solve cooperative games with externalities exhibits some anomalies when related to classical concepts. We elaborate on these problems, define a modification of Bloch's model and show that its order-independent equilibria coincide with the (pessimistic) recursive core.Core, externalities, sequential coalition formation, order-independent equilibria

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