Author : Sergio Currarini
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Book Synopsis Group Stability of Hierarchies in Games With Spillovers by : Sergio Currarini
Download or read book Group Stability of Hierarchies in Games With Spillovers written by Sergio Currarini and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In a recent paper, Demange (2004) has shown that hierarchical organizations can guarantee the existence of stable cooperative outcomes by appropriately allocating the blocking power to a subset of coalitions, the "teams". This paper extends the analysis of Demange to cooperative problems with spillovers. We show that if blocking coalitions have "pessimistic expectations" on the reaction of outsiders, in all cooperative problems there exists an allocation which is blocked by no team. We also study the case of "passive expectations", for which the same result holds in all games with negative spillovers, while stable allocations may fail to exist in games with positive spillovers. In the latter class of games, however, hierarchies are shown to be the most stable organizational forms.