Chapter 5

Coalition Formation

Debraj Ray*; Rajiv Vohra    * Department of Economics, New York University, New York, NY, USA Department of Economics, Brown University, Providence, RI, USA

Abstract

This chapter surveys a sizable and growing literature on coalition formation. We refer to theories in which one or more groups of agents (“coalitions”) deliberately get together to jointly determine within-group actions, while interacting noncooperatively across groups. The chapter describes a variety of solution concepts, using an umbrella model that adopts an explicit real-time approach. Players band together, perhaps disband later and re-form in shifting alliances, all the while receiving payoffs at each date according to the coalition structure ...

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