Consider an environment with widespread externalities, and suppose that binding agreements can be written. We study coalition formation in such a setting. Our analysis proceeds by defining on a partition function an extensive form bargaining game. We establish the existence of a stationary...

This paper reinterprets the ? -core (Chander and Tulkens (1995, 1997)) and justifies it as well as its prediction that the efficient coalition structure is stable in terms of the coalition formation theory. It is assumed that coalitions can freely merge or break apart, are farsighted (that is,...

We consider a model of the 'world' with several regions that may create a unified entity or be partitioned into several unions (countries). The regions have distinct preferences over policies chosen in the country to which they belong and equally share the cost of public policies. It is known...

Given a simple game, a power configuration specifies the power of each player in each winning coalition. We introduce a new power configuration which takes into account bargaining among players in coalitions. We show that under very weak conditions on a bargaining solution there is a power...

We investigate the computational complexity of several decision problems in hedonic coalition formation games and demonstrate that attaining stability in such games remains NP-hard even when they are additive. Precisely, we prove that when either core stability or strict core stability is under...

In this paper we introduce the CLIMNEG World Simulation (CWS) model for simulating cooperative game theoretic aspects of global climate negotiations. The model is derived from the seminal RICE model by Nordhaus and Yang (1996). We first state the necessary conditions that determine optimal...

This paper proposes a model of multilateral contracting where players are engaged in two parallel interactions: they dynamically form coalitions and play a repeated normal form game with temporary and permanent decisions. This formulation encompasses many economic models with externalities and...

This paper analyzes incentives for polluting firms to exchange abatement cost information under the non-linear pollution tax scheme ('differential tax') introduced by Kim and Chang [J. Regul. Econom. 5, 1993, 193-197]. It shows that polluting firms have - under mild conditions - an incentive to...

This paper extends the theory of endogenous coalition formation, with complete information and transferable utility, to the overlapping case. We propose a cover function bargaining game which allows the formation of overlapping coalitions at equilibrium. We show the existence of subgame perfect...