Group Formation in Economics: Networks, Clubs, and Coalitions

by Edited by Gabrielle Demange , Myrna Wooders

• ISBN13: 9780521842716
• ISBN10: 0521842719
• Format: Hardcover
• Copyright: 2005-01-10
• Publisher: Cambridge University Press

Summary

Diverse activities are conducted within and by organized groups of individuals, including political, economic, and social activities. How groups form and are organized to conduct these activities are subjects of intense game-theoretic research. Some of the topics investigated are trade networks, coauthorship networks, buyer-seller networks with differentiated products, and networks of information sharing. Other topics are social norms on punctuality, the adoption of new technologies, clubs and the provision of club goods and public goods, collusive alliances among corporations, international alliances, and trading agreements. This volume introduces the reader to recent literature on game-theoretic treatments of organized groups, with networks, clubs, and coalitions. Book jacket.

Table of Contents

List of Contributors	ix
Introduction	1	(10)
PART ONE NETWORK FORMATION, COMMUNICATION, AND LEARNING
A Survey of Network Formation Models: Stability and Efficiency	11	(47)
Matthew O. Jackson
Introduction	11	(2)
Defining Network Games	13	(6)
Some Examples	19	(6)
Modeling Network Formation	25	(11)
The Relationship between Stability and Efficiency	36	(9)
The Myerson Value and Alternative Allocation Rules	45	(4)
Concluding Discussion	49	(9)
Models of Network Formation in Cooperative Games	58	(31)
Anne van den Nouweland
Introduction	58	(2)
Definitions	60	(3)
Network-Formation Game in Extensive Form	63	(5)
Network-Formation Game in Strategic Form	68	(5)
Comparison of the Network-Formation Models in Extensive and Strategic Forms	73	(1)
Network Formation with Costs for Establishing Links	73	(6)
Simultaneous Bargaining over Network Formation and Payoff Division	79	(6)
Related Literature	85	(4)
Farsighted Stability in Network Formation	89	(33)
Frank H. Page, Jr.
Samir Kamat
Introduction	89	(4)
Directed Networks	93	(2)
Supernetworks	95	(6)
Notions of Farsighted Stability in Network Formation	101	(8)
Computational Examples: Strategic Information Sharing	109	(13)
Learning in Networks	122	(49)
Sanjeev Goyal
Introduction	122	(3)
Networks	125	(2)
Nonstrategic Interaction	127	(10)
Strategic Interaction	137	(12)
Evolving Networks	149	(7)
Optimal Links and Actions in Games	156	(6)
Concluding Remarks	162	(9)
PART TWO ON EQUILIBRIUM FORMATION OF GROUPS: A THEORETICAL ASSESSMENT
Group Formation: The Interaction of Increasing Returns and Preferences Diversity	171	(38)
Gabrielle Demange
Introduction	171	(2)
Competition under Increasing Returns	173	(13)
On Competition across Groups	186	(12)
Public Decision Rules and Mobility	198	(7)
Conclusion	205	(4)
Games and Economies with Near Exhaustion of Gains to Scale	209	(37)
Alexander Kovalenkov
Myrna Wooders
Games with Many Players as Models of Large Economies	209	(3)
Games with Side Payments	212	(3)
Parameterized Collections of Games	215	(1)
Pregames	216	(4)
Nonemptiness of Approximate Cores of Games in Parameterized Collections	220	(3)
Examples of Coalition Production Economies with Small or Large Optimal Firms	223	(1)
Equal Treatment of Similar Individuals	224	(2)
Games and Markets	226	(4)
Examples of Local Public Goods Economies	230	(3)
Attribute Games and Exchange Economies	233	(2)
Some Relationships to the Literature	235	(4)
Conclusions	239	(7)
Coalitions and Clubs: Tiebout Equilibrium in Large Economies	246	(20)
John Conley
Stefani Smith
Introduction	246	(2)
Agents and Crowding	248	(6)
A Local Public Goods Economy	254	(2)
Optimality and Decentralization	256	(2)
Existence	258	(1)
Noncooperative Solutions	259	(1)
Other Results and Future Research	260	(6)
Secession-Proof Cost Allocations and Stable Group Structures in Models of Horizontal Differentiation	266	(23)
Michel Le Breton
Shlomo Weber
Introduction	266	(2)
The Model	268	(1)
Cooperative Framework	269	(2)
Unrestricted Cost-Allocation Correspondence	271	(5)
Restricted Cost-Allocation Correspondence	276	(13)
PART THREE GROUPS, CLUBS, ALLIANCES IN POLITICAL AND ECONOMIC ENVIRONMENTS
Political Parties and Coalition Formation	289	(23)
Amrita Dhillon
Introduction	289	(1)
Preelectoral Coalitions	290	(8)
Postelection Coalitions	298	(4)
Conclusions	302	(10)
Power in the Design of Constitutional Rules	312	(23)
Mika Widgren
Introduction	312	(1)
Measuring Power	313	(6)
Applying Power Indices to the EU	319	(3)
Power in EU Procedures	322	(9)
Concluding Remarks	331	(4)
Group and Network Formation in Industrial Organization: A Survey	335	(19)
Francis Bloch
Introduction	335	(1)
Group and Network Stability	336	(2)
Cartels and Collusive Networks	338	(7)
Alliances and Networks of Collaboration	345	(3)
Trade Networks	348	(6)
Institution Design for Managing Global Commons: Lessons from Coalition Theory	354	(27)
Carlo Carraro
Introduction	354	(3)
Accession Rules and Equilibrium Environmental Coalitions	357	(3)
Endogenous Minimum Participation Rules in International Environmental Agreements	360	(6)
Endogenous Issue Linkage in International Negotiations	366	(4)
Regional versus Global Environmental Treaties	370	(7)
Conclusions	377	(4)
Inequality and Growth Clubs	381	(49)
Fernando Jaramillo
Hubert Kempf
Fabien Moizeau
Introduction	381	(3)
Stratification and Growth: Evidence	384	(4)
Stratification and Growth: Theoretical Approaches	388	(10)
Inequality, Stratification, and Growth	398	(14)
Club Formation Dynamics and Growth	412	(6)
Conclusion	418	(12)
Informal Insurance, Enforcement Constraints, and Group Formation	430	(17)
Garance Genicot
Debraj Ray
Introduction	430	(3)
Group Formation under Equal Sharing	433	(2)
Stationary Transfers	435	(5)
General Results: Asymmetric Treatment and History Dependence	440	(3)
Some Final Remarks	443	(4)
Spontaneous Market Emergence and Social Networks	447	(24)
Marcel Fafchamps
Introduction	447	(2)
A Model of Relational Contracting	449	(11)
Stigmatization and Collective Punishment	460	(3)
Networks and Markets	463	(3)
Conclusion	466	(5)
Index	471