The Nash equilibrium concept combines two fundamental ideas. First, rational players choose the most preferred strategy given their beliefs about what other players will do. Second, it imposes the consistency condition that all players' beliefs are correct. This consistency condition has often...

In Hart and Kurz (1983), stability and formation of coalition structures has been investigated in a noncooperative framework in which the strategy of each player is the coalition he wishes to join. However, given a strategy profile, the coalition structure formed is not unequivocally determined....