Theoretical Economics, Volume 15, Number 2 ( 2020)

Theoretical Economics 15 (2020), 669–714

Equilibrium coalitional behavior

Mert Kimya


I develop two related solution concepts, equilibrium coalitional behavior and credible equilibrium coalitional behavior, which capture foresight and impose the requirement that each coalition in a sequence of coalitional moves chooses optimally among all its available options. The model does not require, but may use, the apparatus of a dynamic process or a protocol that specifies the negotiation procedure underlying coalition formation. Therefore, it forms a bridge between the non-cooperative and the cooperative approaches to foresight.

Keywords: Coalition formation, farsightedness

JEL classification: C70, C71, C72, D71

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