TY - JOUR

T1 - A Theory of Gradual Coalition Formation

AU - Seidmann, D.J.

AU - Winter, E.

PY - 1998/10/1

Y1 - 1998/10/1

N2 - We study noncooperative multilateral bargaining games, based on underlying TU games, in which coalitions can renegotiate their agreements. We distinguish between models in which players continue to bargain after implementing agreements ("reversible actions") and models in which players who implement agreements must leave the game ("irreversible actions"). We show that renegotiation always results in formation of the grand coalition if actions are reversible, but that the process may otherwise end with smaller coalitions. On the other hand, we show that the grand coalition cannot form in one step if the core of the game is empty, irrespective of the reversibility of actions.

AB - We study noncooperative multilateral bargaining games, based on underlying TU games, in which coalitions can renegotiate their agreements. We distinguish between models in which players continue to bargain after implementing agreements ("reversible actions") and models in which players who implement agreements must leave the game ("irreversible actions"). We show that renegotiation always results in formation of the grand coalition if actions are reversible, but that the process may otherwise end with smaller coalitions. On the other hand, we show that the grand coalition cannot form in one step if the core of the game is empty, irrespective of the reversibility of actions.

U2 - 10.1111/1467-937X.00069

DO - 10.1111/1467-937X.00069

M3 - Journal article

VL - 65

SP - 793

EP - 815

JO - Review of Economic Studies

JF - Review of Economic Studies

SN - 0034-6527

IS - 4

ER -