The Library
Dynamic club formation with coalitional deviations
Tools
Arnold, Tone and Wooders, Myrna Holtz (2009) Dynamic club formation with coalitional deviations. In: DIME International Conference on the Formation of Economics and Social Networks, Paris, 25-27 Jun 2009 (Unpublished)
Research output not available from this repository.
Request-a-Copy directly from author or use local Library Get it For Me service.
Official URL: http://www.icfsn.net/Program.html
Abstract
We present a dynamic model of endogenous club formation in a hedonic game setting. Players are boundedly rational and optimize myopically. Clubs are viewed not only as social institutions, or mechanisms for the provision of public goods, but also serve to facilitate communication. Thus, coalitions are required to consist of members of the same club. Coalitions can form for one period and coalition members can jointly decide how to deviate. We define a Nash club equilibrium (NCE) as a strategy profile that is immune to such coalitional deviations. For single—peaked preferences, we provide conditions ensuing the existence of a NCE. Our dynamic process is described by a finite Markov chain defined by myopic optimization on the part of coalitions. We show when a NCE exists, the process will converge to a NCE profile with probability one. NCE is unique up to a renaming of players and locations. Further, NCE corresponds to strong Nash equilibrium in the club formation game. Finally, we deal with the case where NCE fails to exist. When the population size is not an integer multiple of an optimal club size, there may be ‘left-over’ players who cannot be accommodated in clubs of optimal sizes and who may prevent the dynamic process from settling down. To treat this case, we define the concept of k—remainder NCE, which requires that all but k players are playing a Nash club equilibrium, where k is defined by the minimal number of left-over players. This captures the intuition that, if the number of players is large, a few left—over players cannot substantially affect outcomes. We show that our process converges to an ergodic NCE, that is a set of states consisting of k—remainder NCE only.
Item Type: | Conference Item (Paper) | ||||
---|---|---|---|---|---|
Subjects: | H Social Sciences > HB Economic Theory | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Official Date: | 27 June 2009 | ||||
Dates: |
|
||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Unpublished | ||||
Version or Related Resource: | Arnold, Tone and Wooders, Myrna Holtz (2009). Dynamic club formation with coalitional deviations. In: Association for Public Economic Theory Conference 2009. Galway, 18-20 Jun 2009. | ||||
Conference Paper Type: | Paper | ||||
Title of Event: | DIME International Conference on the Formation of Economics and Social Networks | ||||
Type of Event: | Conference | ||||
Location of Event: | Paris | ||||
Date(s) of Event: | 25-27 Jun 2009 | ||||
Related URLs: |
Request changes or add full text files to a record
Repository staff actions (login required)
View Item |