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Group Formation with Heterogeneous Feasible Sets

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Institutions, Equilibria and Efficiency

Part of the book series: Studies in Economic Theory ((ECON.THEORY,volume 25))

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Summary

In this paper we consider a model of group formation where group of individuals may have different feasible sets. We focus on two polar cases, increasing returns, when the set of feasible alternatives increases if a new member joins the group, and decreasing returns, when a new member has an opposite effect and reduces the number of alternatives available for the enlarged group. We consider two notions, stability and strong stability of group structures, that correspond to Nash and Strong Nash equilibrium of the associated non-cooperative game. We prove existence results for various classes of environments and also investigate the link between dimensionality of feasible sets and the existence of stable structures.

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Author information

Authors and Affiliations

  1. GREMAQ and IDEI, Université de Toulouse I, Toulouse, France

    Michel Le Breton

  2. Department of Economics, Southern Methodist University, Dallas, USA

    Shlomo Weber

  3. CORE, Catholic University of Louvain-la-Neuve, Belgium

    Shlomo Weber

Authors
  1. Michel Le Breton
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  2. Shlomo Weber
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Editor information

Editors and Affiliations

  1. Department of Economics, University of Copenhagen, Studienstræde 6, 1455, Copenhagen K, Denmark

    Christian Schultz

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© 2006 Springer-Verlag Berlin Heidelberg

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Le Breton, M., Weber, S. (2006). Group Formation with Heterogeneous Feasible Sets. In: Schultz, C., Vind, K. (eds) Institutions, Equilibria and Efficiency. Studies in Economic Theory, vol 25. Springer, Berlin, Heidelberg. https://doi.org/10.1007/3-540-28161-4_16

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