We adopt the largest consistent set defined by Chwe [J. of Econ. Theory 63 (1994), 299-235] to predict which coalition …, based on the assumption that players are cautious. For games with positive spillovers, many coalition structures may belong … to the largest consistent set. The grand coalition, which is the efficient coalition structure, always belongs to the …

We adopt the largest consistent set defined by Chwe [J. of Econ. Theory 63 (1994), 299-235] to predict which coalition …, based on the assumption that players are cautious. For games with positive spillovers, many coalition structures may belong … to the largest consistent set. The grand coalition, which is the efficient coalition structure, always belongs to the …

players and spillovers to non-members. I introduce a sharing rule for coalition payoffs, called optimal sharing which … stabilises all cartels that are possibly stable under any rule. Under optimal sharing the grand coalition is the unique stable …