Preliminary Results for Cooperative Extensions of the Bayesian Game

The descriptive theory of cooperative game with incomplete information developed to date is surveyed. The theory has the potential to provide game-theoretical foundations of economic analysis of the free societies in which organizations (coalitions) as corporations institute a non-market resource allocation mechanism while using the market resource allocation mechanism at the same time. The present-day corporations are interdependent, so the required game theory needs to model an environment in which the feasibility and implications of coordinated strategy choice within a coalition are influenced by the outsiders of strategy choice. The first part of the paper provides the key ingredients. After formulating the basic one-shot model, which synthesizes Harsanyi's Bayesian game and Aumann and Peleg's non-side-payment game (NTU game), and illustrating economic examples, two required conditions on an endogenously determined strategy are discussed: measurability with respect to an information structure, and Bayesian incentive compatibility. Several descriptive solution concepts that have been proposed to date are discussed. The second part addresses six issues studied in the literature: First, the existence of the descriptive solutions in the general setup. Second, explanation of information revelation, that is, a process through which private information turns into public information. Third, definitions of efficiency. Fourth, comparisons of several core concepts. Fifth, the existence results specific only to the Bayesian pure exchange economy, and revival of the core convergence theorem within the framework of the Bayesian pure exchange economy. Sixth, another view on coalition formation, specifically analyses of situations in which coalitional membership is anonymous.

Exogenous coalition formation in the e-marketplace based on geographical proximity

This paper considers a model for exogenous coalition formation in e-marketplaces. Using the informational advantage e-retailer creates coalitions of customers based on geographical proximity. Most of the literature regards this process as endogenous: a coalition leader bundles eventual purchases together in order to obtain a better bargaining position. In contrast - and in response to what is being observed in business practice - we analyse a situation in which an existing e-retailer exogenously forms customers' coalitions. Results of this study are highly encouraging. Namely, we demonstrate that even under highly imperfect warehouse management schemes leading to contagion eects, suggested combined delivery service may oer signifficant efficiency gains as well as opportunities for Pareto-improvement.Coalition formation, e-commerce, multi-agent systems, consumer satisfaction, demand planning, warehouse management.

Rivalry, Exclusion and Coalitions

Coalition formation, exclusion contest, tragedy of the commons

An Enforcement-Coalition Model: Fishermen and Authorities forming Coalitions

The paper sets up a four-stage enforcement model of fish quotas. The purpose of the paper is to show how the level of enforcement set by the authorities af-fects the way fishermen form coalitions. We show that a high level of control effort yields less cooperation among fishermen, while in the case of low control effort, coalitions are somewhat self-enforcing. The paper further discusses how the optimal enforcement level changes when the coalition formation among au-thorities changes: centralised, partly centralised and decentralised authorities. We show that decentralised authorities set a lower level of control effort com-pared to the centralised authorities. The theoretical results are illustrated by simulations of the Baltic Sea cod fishery.Coalition formation, Fisheries management, Quota enforcement, Self-enforcing policy

Power distribution in the electoral body with an application to the Russian Parliament

This paper presents several new approaches to evaluate power distribution in an electoral body. We define the index of consistency of two groups’ positions (briefly, the consistency index) which is used to separate possible coalitions in the Parliament. This allows to analyze power distribution within restricted coalition formations. Then we provide several new power indices for the case in which the intensity of factions to coalesce is taken into account. Our analysis of the power distribution model extends the one proposed by Shapley-Owen. A new consistency index is given allowing to construct such an extension. We illustrate these approaches via the analysis of power distribution among factions in the Russian Parliament (Duma) from 1993 to 2005.

Optimal Income Taxation and Public-Goods Provision with Preference and Productivity Shocks

We study how an optimal income tax and an optimal public-goods provision rule respond to preference and productivity shocks. A conventional Mirrleesian treatment is shown to provoke manipulations of the policy mechanism by individuals with similar interests. We therefore extend the Mirrleesian model so as to include a requirement of coalition-proofness. The main results are the following: first, the possibility of preference shocks yields a new set of collective incentive constraints. Productivity shocks have no such implication. Second, the optimal policy gives rise to a positive correlation between the public-goods provision level, the extent of redistribution and marginal tax rates.Public Goods, Optimal Taxation, Mechanism Design