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Group Formation in Economics : Networks, Clubs, and Coalitions - Gabrielle Demange

Group Formation in Economics

Networks, Clubs, and Coalitions

By: Gabrielle Demange (Editor), Myrna Wooders (Editor)

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Published: 10th January 2005
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Broad and diverse ranges of activities are conducted within and by organized groups of individuals, including political, economic and social activities. These activities have recently become a subject of intense interest in economics and game theory. Some of the topics investigated in this collection are models of networks of power and privilege, trade networks, co-authorship networks, buyer-seller networks with differentiated products, and networks of medical innovation and the adaptation of new information. Other topics are social norms on punctuality, clubs and the provision of club goods and public goods, research and development and collusive alliances among corporations, and international alliances and trading agreements. While relatively recent, the literature on game theoretic studies of group formation in economics is already vast. This volume provides an introduction to this important literature on game-theoretic treatments of situations with networks, clubs, and coalitions, including some applications.

List of Contributorsp. ix
Introductionp. 1
Network Formation, Communication, and Learning
A Survey of Network Formation Models: Stability and Efficiencyp. 11
Introductionp. 11
Defining Network Gamesp. 13
Some Examplesp. 19
Modeling Network Formationp. 25
The Relationship between Stability and Efficiencyp. 36
The Myerson Value and Alternative Allocation Rulesp. 45
Concluding Discussionp. 49
Models of Network Formation in Cooperative Gamesp. 58
Introductionp. 58
Definitionsp. 60
Network-Formation Game in Extensive Formp. 63
Network-Formation Game in Strategic Formp. 68
Comparison of the Network-Formation Models in Extensive and Strategic Formsp. 73
Network Formation with Costs for Establishing Linksp. 73
Simultaneous Bargaining over Network Formation and Payoff Divisionp. 79
Related Literaturep. 85
Farsighted Stability in Network Formationp. 89
Introductionp. 89
Directed Networksp. 93
Supernetworksp. 95
Notions of Farsighted Stability in Network Formationp. 101
Computational Examples: Strategic Information Sharingp. 109
Learning in Networksp. 122
Introductionp. 122
Networksp. 125
Nonstrategic Interactionp. 127
Strategic Interactionp. 137
Evolving Networksp. 149
Optimal Links and Actions in Gamesp. 156
Concluding Remarksp. 162
On Equilibrium Formation of Groups: A Theoretical Assessment
Group Formation: The Interaction of Increasing Returns and Preferences Diversityp. 171
Introductionp. 171
Competition under Increasing Returnsp. 173
On Competition across Groupsp. 186
Public Decision Rules and Mobilityp. 198
Conclusionp. 205
Games and Economies with Near Exhaustion of Gains to Scalep. 209
Games with Many Players as Models of Large Economiesp. 209
Games with Side Paymentsp. 212
Parameterized Collections of Gamesp. 215
Pregamesp. 216
Nonemptiness of Approximate Cores of Games in Parameterized Collectionsp. 220
Examples of Coalition Production Economies with Small or Large Optimal Firmsp. 223
Equal Treatment of Similar Individualsp. 224
Games and Marketsp. 226
Examples of Local Public Goods Economiesp. 230
Attribute Games and Exchange Economiesp. 233
Some Relationships to the Literaturep. 235
Conclusionsp. 239
Coalitions and Clubs: Tiebout Equilibrium in Large Economiesp. 246
Introductionp. 246
Agents and Crowdingp. 248
A Local Public Goods Economyp. 254
Optimality and Decentralizationp. 256
Existencep. 258
Noncooperative Solutionsp. 259
Other Results and Future Researchp. 260
Secession-Proof Cost Allocations and Stable Group Structures in Models of Horizontal Differentiationp. 266
Introductionp. 266
The Modelp. 268
Cooperative Frameworkp. 269
Unrestricted Cost-Allocation Correspondencep. 271
Restricted Cost-Allocation Correspondencep. 276
Groups, Clubs, Alliances in Political and Economic Environments
Political Parties and Coalition Formationp. 289
Introductionp. 289
Preelectoral Coalitionsp. 290
Postelection Coalitionsp. 298
Conclusionsp. 302
Power in the Design of Constitutional Rulesp. 312
Introductionp. 312
Measuring Powerp. 313
Applying Power Indices to the EUp. 319
Power in EU Proceduresp. 322
Concluding Remarksp. 331
Group and Network Formation in Industrial Organization: A Surveyp. 335
Introductionp. 335
Group and Network Stabilityp. 336
Cartels and Collusive Networksp. 338
Alliances and Networks of Collaborationp. 345
Trade Networksp. 348
Institution Design for Managing Global Commons: Lessons from Coalition Theoryp. 354
Introductionp. 354
Accession Rules and Equilibrium Environmental Coalitionsp. 357
Endogenous Minimum Participation Rules in International Environmental Agreementsp. 360
Endogenous Issue Linkage in International Negotiationsp. 366
Regional versus Global Environmental Treatiesp. 370
Conclusionsp. 377
Inequality and Growth Clubsp. 381
Introductionp. 381
Stratification and Growth: Evidencep. 384
Stratification and Growth: Theoretical Approachesp. 388
Inequality, Stratification, and Growthp. 398
Club Formation Dynamics and Growthp. 412
Conclusionp. 418
Informal Insurance, Enforcement Constraints, and Group Formationp. 430
Introductionp. 430
Group Formation under Equal Sharingp. 433
Stationary Transfersp. 435
General Results: Asymmetric Treatment and History Dependencep. 440
Some Final Remarksp. 443
Spontaneous Market Emergence and Social Networksp. 447
Introductionp. 447
A Model of Relational Contractingp. 449
Stigmatization and Collective Punishmentp. 460
Networks and Marketsp. 463
Conclusionp. 466
Indexp. 471
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ISBN: 9780521842716
ISBN-10: 0521842719
Audience: Professional
Format: Hardcover
Language: English
Number Of Pages: 494
Published: 10th January 2005
Publisher: Cambridge University Press
Country of Publication: GB
Dimensions (cm): 23.4 x 15.6  x 2.7
Weight (kg): 0.91