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Deviations, uncertainty and the core

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  • Routledge, R.R.

Abstract

The study of coalition formation under uncertainty poses subtle questions regarding the appropriate definition of the core. In this paper a new core concept, the interim sequential core (ISC), is proposed as a solution concept to transferable utility games with uncertainty when binding agreements cannot be written. This solution concept remedies a problem with the weak sequential core (WSC) of Habis and Herings (2011) but avoids the myopia implicit in the strong sequential core (SSC). The three core notions are shown to be related by the subset inclusion ordering. The solution concept is demonstrated by analyzing the production economies of Shapley and Shubik (1967).

Suggested Citation

  • Routledge, R.R., 2014. "Deviations, uncertainty and the core," Games and Economic Behavior, Elsevier, vol. 88(C), pages 286-297.
    • Handle: RePEc:eee:gamebe:v:88:y:2014:i:c:p:286-297
    DOI: 10.1016/j.geb.2014.10.001
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    References listed on IDEAS

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    More about this item

    Keywords

    Credible deviations; Agreement formation; Cooperative games;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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