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Membership rules and stability of coalition structures in positive externality games

Social Choice and Welfare volume 32, pages 389–406 (2009)Cite this article

Abstract

This paper compares the stability of coalition structures under six institutional settings of treaty formation in positive externality games. We argue that many economic problems belong to the class of positive externality games (i.e. outsiders benefit from the formation of coalitions) and hence our results can be applied to many situations. It is shown that it is easier to sustain agreements under exclusive than under open membership and the higher the “degree of consensus” necessary to form a coalition.

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Authors and Affiliations

  1. Department of Economics, University of Stirling, Stirling, FK9 4LA, Scotland, UK

    Michael Finus

  2. Department of Economics, University of Hagen, Profilstr. 8, 58084, Hagen, Germany

    Bianca Rundshagen

Authors
  1. Michael Finus
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  2. Bianca Rundshagen
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Correspondence to Michael Finus.

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Finus, M., Rundshagen, B. Membership rules and stability of coalition structures in positive externality games. Soc Choice Welf 32, 389–406 (2009). https://doi.org/10.1007/s00355-008-0330-z

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Keywords

  • Coalition Formation
  • Coalition Structure
  • Positive Externality
  • Coalition Game
  • Coalition Member