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Link formation in cooperative situations

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Abstract.

In this paper we study the endogenous formation of cooperation structures or communication graphs between players in a superadditive TU game. For each cooperation structure that is formed, the payoffs to the players are determined by an exogenously given solution. We model the process of cooperation structure formation as a game in strategic form. It is shown that several equilibrium refinements predict the formation of the complete cooperation structure or some structure which is payoff-equivalent to the complete structure. These results are obtained for a large class of solutions for cooperative games with cooperation structures.

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Authors and Affiliations

  1. Indian Statistical Institute, 7SJS Sansanwal Marg, New Delhi-110016, India (e-mail dutta@isid.ernet.in), , , , , , IN

    Bhaskar Dutta

  2. Department of Economics, 435 PLC, 1285 University of Oregon, Eugene, OR 97403-1285, U.S.A. (e-mail Annev@oregon.uoregon.edu), , , , , , US

    Anne van den Nouweland

  3. Department of Econometrics and Center for Economic Research, Tilburg University, PO Box 90153, 5000 LE Tilburg, The Netherlands (e-mail Tijs@kub.nl), , , , , , NL

    Stef Tijs

Authors
  1. Bhaskar Dutta
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  2. Anne van den Nouweland
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  3. Stef Tijs
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Additional information

Received September 1995/Revised version I October 1996/Revised version II April 1997/Final version September 1997

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Dutta, B., van den Nouweland, A. & Tijs, S. Link formation in cooperative situations. Game Theory 27, 245–256 (1998). https://doi.org/10.1007/s001820050070

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  • DOI: https://doi.org/10.1007/s001820050070

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