. Trade agreement formation is modeled as coalition formation. In a standard trade model with no distance between countries, a …

Assume that players strictly rank each other as coalition partners. We propose a procedure whereby they “fall back” on … their preferences, yielding internally compatible, or coherent, majority coalition(s), which we call fallback coalitions. If … there is more than one fallback coalition, the players common to them, or kingmakers, determine which fallback coalition …

We propose a framework to analyze coalition formation with heterogeneous agents. Existing literature defines stability … conditions that do not ensure that, once an agent decides to sign an agreement, the enlarged coalition is feasible. Defining the … concepts of refraction and exchanging, we set up conditions of existence and enlargement of a coalition with heterogeneous …