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Farsighted Rationality in Hedonic Games

Author

Listed:
  • G.-Herman Demeze-Jouatsa

    (Bielefeld University)

  • Dominik Karos

    (Bielefeld University)

Abstract

We consider a hedonic coalition formation game in which a coalition chooses for each partition of the player set the probability with which it forms and thereby destroys the current partition. These probabilities are commonly known so that farsighted players know at every partition what future partitions, and hence payoffs, will be reached with what probability. Thus, players can make rational decisions about the moves they support. We show that if coalitions make mistakes with small but positive probability, then there is a behavior profile in which no coalition has a profitable one-shot deviation.

Suggested Citation

  • G.-Herman Demeze-Jouatsa & Dominik Karos, 2023. "Farsighted Rationality in Hedonic Games," Dynamic Games and Applications, Springer, vol. 13(2), pages 462-479, June.
    • Handle: RePEc:spr:dyngam:v:13:y:2023:i:2:d:10.1007_s13235-022-00474-8
    DOI: 10.1007/s13235-022-00474-8
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Abstract games; Hedonic games; Farsighted stability; Coalition stable equilibrium;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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