We consider a perfectly competitive ex ante economy with a continuum of agents and negligible asymmetric information. For such an economy we recast the basic classical results on the existence of Walrasian equilibrium, core equivalence, and the blocking size of coalitions. Moreover, we examine the incentive compatibility of the ex ante Pareto, core and Walrasian allocations. © 2007 Elsevier Inc...

We argue that, in exchange economies, various versions of the bargaining set cannot be implemented in Nash equilibrium. We then propose an extensive form mechanism that exactly implements the Aumann–Davis–Maschler bargaining set in subgame perfect equilibrium. The mechanism corresponds closely to the description of the bargaining set and respects feasibility in and out of equilibrium. Journal o...

This paper presents synthetically some recent developments in the theory of coalition and network formation. For this purpose, some major equilibrium concepts recently introduced to model the formation of coalition structures and networks among players are brie‡y reviewed and discussed. A few economic applications are also illustrated to give a ‡avour of the type of predictions such models are ...

The paper discusses the important role of clustering in the evolution of social networks, as it affects not only the incentives of players to cooperate but also their ability to search for fresh opportunities. Depending on the volatility of the environment and the social convention in place, we show that network clustering endogenously adapts to achieve and maintain, to the extent possible, a s...

This note adds one celebrated coalition formation game due to Gamson (1961) in the list of applications of the theory of hedonic games explored by Banerjee, Konishi and Somnez (2001) and Bogomolnaia and Jackson (2002). We apply their results to study the original Gamson game and o er extensions both to a multi-dimensional characteristics space and to an in nite number of players. JEL Classi ca...

Previous allocation rules for network games, such as the Myerson Value, implicitly or explicitly take the network structure as fixed. In many situations, however, the network structure can be altered by players. This means that the value of alternative network structures (not just sub-networks) can and should influence the allocation of value among players on any given network structure. I pres...

This paper deals with bankruptcy situations in which in addition to the claims, an exogenously given reference point for the allocation of the estate is present. We introduce and analyse two types of compromise solutions and show that they coincide with the τ value of two corresponding TU games. We apply our solutions to a real-life case of allocating university money to degree courses. JEL-cod...

In order to calculate the worth of a coalition of players, the coalition needs to predict the actions of outsiders. We propose that, for a given solution concept, such predictions should be made by applying the solution concept to the “reduced society” consisting of the non-members. We illustrate by computing the r-core for the case of Bertrand competition with differentiated commodities.  200...

We study coalitional one-deviation principle in a framework à la Chwe (1994). The principle requires that an active coalition or any of its subcoalition will not benefit from a single deviation to a strategy that specifies, for each history of coalitional moves, an active coalition and its move. A strategy meeting the one-deviation property is characterized. Moreover, it is shown to exist. Fina...

We implement a family of efficient proposals to share benefits generated in environments with externalities. These proposals extend the Shapley value to games with externalities and are parametrized through the method by which the externalities are averaged. We construct two slightly different mechanisms: one for environments with negative externalities and the other for positive externalities....