Stationary Consistent Equilibrium Coalition Structures Constitute the Recursive Core

Laszlo A. Koczy
2009 Social Science Research Network  
We study coalitional games where the coalitional payoffs depend on the embedding coalition structure. We introduce a noncooperative, sequential coalition formation model and show that the set of equilibrium outcomes coincides with the recursive core, a generalisation of the core to such games. In order to extend past results limited to totally recursive-balanced partition function form games we introduce a more permissive perfectness concept, subgame-consistency that only requires perfectness
more » ... selected subgames. Due to the externalities, the profitability of deviations depends on the partition formed by the remaining players: the stability of core payoff configurations is ensured by a combination of the pessimism of players going for certain profits only and the assumption that players base their stationary strategies * The author thanks Lars Ehlers for his comments and the Hungarian Academy of Sciences for the financial support (LP-004/2010).
doi:10.2139/ssrn.1511584 fatcat:lmphjws24bcodnsyi526vuckr4