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Majority Rule and Coalitional Stability

Author

Listed:
  • Sergio Currarini

    (University of Leicester, University of Venice and CMCC)

  • Marco A. Marini

    (Department of Computer, Control & Management Engineering, Sapienza University of Rome and CREI)

Abstract

In this note we study the centralization vs. decentralization issue for the management of a given collective activity. The aim is to characterize a class of decision rules that guarantees the stability of global cooperation (i.e centralization) against the incentive of coalitions of citizens to opt-out, towards forms of decentralized organizations. We show that a simple majority rule required to break global cooperation guarantees the existence of core-stable allocations, independently of the expected behaviour of individuals in the minority. We also show that if majorities can extract resources from minorities, stability may require a supermajority rule, whose threshold is increasing in its extraction power.

Suggested Citation

  • Sergio Currarini & Marco A. Marini, 2013. "Majority Rule and Coalitional Stability," Economics Bulletin, AccessEcon, vol. 33(3), pages 1660-1668.
    • Handle: RePEc:ebl:ecbull:eb-13-00404
    as

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    References listed on IDEAS

    as
    1. Currarini, Sergio, 2007. "Group stability of hierarchies in games with spillovers," Mathematical Social Sciences, Elsevier, vol. 54(3), pages 187-202, December.
    2. Partha Dasgupta & Eric Maskin, 2008. "On The Robustness of Majority Rule," Journal of the European Economic Association, MIT Press, vol. 6(5), pages 949-973, September.
    3. Sergio Currarini & Marco A. Marini, 2006. "Coalition Formation In Games Without Synergies," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 111-126.
    4. Yi, Sang-Seung, 1997. "Stable Coalition Structures with Externalities," Games and Economic Behavior, Elsevier, vol. 20(2), pages 201-237, August.
    5. Ray, Debraj, 2007. "A Game-Theoretic Perspective on Coalition Formation," OUP Catalogue, Oxford University Press, number 9780199207954.
    6. Carlo Carraro (ed.), 2003. "The Endogenous Formation of Economic Coalitions," Books, Edward Elgar Publishing, number 2999.
    7. Hafalir, Isa E., 2007. "Efficiency in coalition games with externalities," Games and Economic Behavior, Elsevier, vol. 61(2), pages 242-258, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Majority Rule; Supermajority; Externalities; Core.;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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