Forming and Dissolving Partnerships in Cooperative Game Situations

A group of players in a cooperative game are partners (e.g., as in the form of a union or a joint ownership) if the prospects for cooperation are restricted such that cooperation with players outside the partnership requires the accept of all the partners. The formation of such partnerships through binding agreements may change the game implying that players could have incentives to manipulate a game by forming or dissolving partnerships. The present paper seeks to explore the existence of allocation rules that are immune to this type of manipulation. An allocation rule that distributes the worth of the grand coalition among players, is called partnership formation-proof if it ensures that it is never jointly profitable for any group of players to form a partnership and partnership dissolution-proof if no group can ever profit from dissolving a partnership. The paper provides results on the existence of such allocation rules for general classes of games as well as more specific results concerning well known allocation rules.cooperative games; partnerships; partnership formation-proof; partnership dissolution-proof

Endogenous Formation of Competing Partnership with Moral Hazard

Published as an article in: Games and Economic Behavior, 2003, vol. 44, issue 1, pages 183-194.endogenous coalition formation, moral hazard, partnerships

Exploiting simple corporate memory in iterative coalition games

Amongst the challenging problems that must be addressed in order to create increasingly automated electronic commerce systems are those which involve forming coalitions of agents to exploit a particular market opportunity. Furthermore economic systems are normally continuous dynamic systems generating many instances of the same or similar problems (the regular calls for tender, regular emergence of new markets etc.).The work described in this paper explores how simple forms of memory can be exploited by agents over time to guide decision making in iterative sequences of coalition formation problems enabling them to build up social knowledge in order to improve their own utility and the ability of the population to produce increasingly well suited coalitions for a simple call-for-tender economy.Postprint (published version

The endogenous formation of cartels

games;production;cartels

The strategy of conflict and cooperation

In this paper, I introduce (i) a novel and unified framework, called cooperative extensive form games, for the study of strategic competition and cooperation, which have been studied in specific contexts, and (ii) a novel solution concept, called cooperative equilibrium system. I show that non-cooperative extensive form games are a special case of cooperative extensive form games, in which players can strategically cooperate (e.g., by writing a possibly costly contract) or act non-cooperatively. To the best of my knowledge, I propose the first solution to the long-standing open problem of "strategic cooperation" first identified by von Neumann (1928). I have one main result to report: I prove that cooperative equilibrium system always exists in finite $n$-person cooperative strategic games with possibly imperfect information. The proof is constructive in the case of perfect information games.Comment: 57 page

Compensating Losses and Sharing Surpluses in Project-Allocation Situations (version 2)

By introducing the notions of projects and shares, this paper studies a class of economic environments, the so-called project-allocation situations, in which society may profit from cooperation, i.e., by reallocating the initial shares of projects among agents.This paper mainly focuses on the associated issues of compensation of losses and surplus sharing arising from the reallocation of projects.For this purpose, we construct and analyze an associated project-allocation game and a related system of games that explicitly models the underlying cooperative process.Speciffic solution concepts are proposed.allocation;games;projects;cooperation

Anonymous Price Taking Equilibrium in Tiebout Economies with Unbounded Club Sizes

We introduce a model of a local public goods economy with a continuum of agents and jurisdictions with finite, but unbounded populations. Under boundedness of per capita payoffs we demonstrate nonemptiness of the core of the economy. We then demonstrate that the equal treatment core coincides with the set of price-taking equilibrium outcomes with anonymous prices - that is, prices for public goods depend only on observable characteristics of agents. Existence of equilibrium follows from nonemptiness of the core and equivalence of the core to the set of equilibrium outcomes. Our approach provides a new technique for showing existence of equilibrium in economies with a continuum of agents.Tiebout, Clubs, Jurisdictions, F-core, Core-equilibrium equivalence, Edgeworth equivalence, Continuum economies with clubs, Crowding types, Core, Equal treatment core