Stability and Fairness in Models with a Multiple Membership

Abstract

This article studies a model of coalition formation for the joint production (and finance) of public projects, in which agents may belong to multiple coalitions. We show that, if projects are divisible, there always exists a stable (secession-proof) structure, i.e., a structure in which no coalition would reject a proposed arrangement. When projects are in-divisible, stable allocations may fail to exist and, for those cases, we resort to the least core in order to estimate the degree of instability. We also examine the compatibility of stability and fairness on metric environments with indivisible projects. To do so, we explore, among other things, the performance of several well-known solutions (such as the Shapley value, the nucleolus, or the Dutta-Ray value) in these environments.

JEL codes

Replaced by

Michel Le Breton, Juan D. Moreno-Ternero, Alexei Savvateev, and Shlomo Weber, “Stability and Fairness in Models with a Multiple Membership”, International Journal of Game Theory, vol. 42, n. 3, August 2013, pp. 673–694.

Reference

Michel Le Breton, Juan D. Moreno-Ternero, Alexei Savvateev, and Shlomo Weber, “Stability and Fairness in Models with a Multiple Membership”, TSE Working Paper, n. 12-300, May 2012.