Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154902
Authors: 
Ray, Debraj
Vohra, Rajiv
Year of Publication: 
1998
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 44.1998
Abstract: 
Consider an environment with widespread externalities, and suppose that binding agreements can be written. We study coalition formation in such a setting. Our analysis proceeds by defining on a partition function an extensive form bargaining game. We establish the existence of a stationary subgame perfect equilibrium for such a game. Our main results are concerned with the characterisation of equilibrium coalition structures. We develop an algorithm that generates (under certain conditions) an equilibrium coalition structure. Our characterisation results are especially sharp for symmetric partition functions. In particular, we provide a uniqueness theorem and apply our results to a Cournot oligopoly.
Subjects: 
Externalities
Bargaining
Partition function
Coalition structures
JEL: 
C71
C72
C78
D62
Document Type: 
Working Paper

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