Group Formation in Economics : Networks, Clubs, and Coalitions

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