RIEB Discussion Paper Series No.2021-15

Title

The Bargaining Set and Coalition Formation

Abstract

We address the problem of predicting how rational agents will form coalitions in a nontransferable utility game, and within each coalition how they will allocate the gains obtained through cooperation. To answer these questions, we propose solution concepts according to which the coalition structure and the payoff allocations are simultaneously determined. We prove the nonemptiness and partial efficiency of the steady bargaining set, a refinement of the Zhou bargaining set, for at least one coalition structure under the restrictive non-crossing condition. In addition, we show the nonemptiness and possible inefficiency of the Mas-Colell bargaining set if this condition is not assumed.

Keywords

Nontransferable utility game; Coalition structure; Bargaining set; Restrictive non-crossing condition

JEL Classification

C71, D71

Inquiries

Ken-Ichi SHIMOMURA
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059