Restricted Coalition Formation

Abstract

Very often in social life individuals take decisions within groups (households, friendships, trade unions, local jurisdictions, networks, etc.). The formation of coalition may imply some theoretical difficulties, such as costs arising from forming a coalition or sharing information among agents. Coalition formation has the explicit purpose to represent the process of formation of coalitions of agents and hence modelling a number of relevant economic and social phenomena. Moreover, following this theoretical and applied literature on coalitions, the seminal chapter by Jackson and Wolinsky (1996) opened the way to a new stream of contributions using networks (graphs) to model the formation of links among individuals. In this chapter we will assume that only a subset $\fancyscript{S}$ of the set of all possible coalitions in an economy is the set of admissible coalitions. We define the $\fancyscript{S}$-core concept, as in Hervès-Moreno. We will extend to a model with both uncertainty and asymmetric informations the results showed in Okuda and Shitovitz.