Hedonic Coalitions: Optimality and Stability

Strategy-proof coalition formation

“…This point is discussed in Appendix B. 10 In order to check that ϕ −SP is manipulable, let N = {i, j, k}, ∈ D * , and j ∈ D * j be such that {i, j} i {i, j, k} i {i}, {i, j, k} j {i, j} j {j, k} j {j}, and {i, k} k {i, j, k} k {k}; while {j, k} j {i, j, k} j {j}. Note that ϕ −SP ( ) = ({i, j}, {k}), while ϕ −SP ( N \{j} , j ) = {i, j, k}.…”

“…However, ϕ −SP violates strategy-proofness. 10 Example 3 (Individual rationality). Let N = {i, j, k}.…”

“…Following the terminology proposed by Drèze and Greensberg [10], we focus on problems characterized by the "hedonic" aspect of coalition formation. Agents' preferences only depend on the identity of the members of the coalition they belong to.…”

Stable and efficient coalitional networks

“…6 Looking at two models of coalitional network formation (a connections model with cost sharing among municipalities and a R&D model where …rms form R&D bilateral agreements and belong to alliances), we observe that requiring the consent of coalition members under the simple majority or unanimity decision rule may help to reconcile stability and e¢ ciency. 7 We also show that this new framework provides us results that one cannot obtain if coalition formation and network formation are tackled separately and independently. In general, contractually stable coalitional networks may fail to exist.…”

The Tiebout hypothesis under membership property rights

“…Moreover, we conjecture that our results prevail under any allocation rule which satis…es the population monotonicity condition used by Sertel and Yildiz (1998). 7 We owe this terminology to Drèze and Greenberg (1980) who call the dependence of an agent's payo¤ to only the members of his coalition the "hedonic aspect". A thorough analysis of hedonic coalition structures is made by Bogomolnaia and Jackson (2002).…”