Non-Cooperative Team Formation and a Team Formation Mechanism

39 Pages Posted: 22 Oct 2017

See all articles by Matthew Chambers

Matthew Chambers

Vanderbilt University, College of Arts and Science, Department of Economics, Students

Chen Hajaj

Vanderbilt University - Department of Electrical Engineering and Computer Science

Greg Leo

Vanderbilt University - College of Arts and Science - Department of Economics

Jian Lou

Vanderbilt University, Department of Electrical Engineering and Computer Science, Students

Martin Van der Linden

Emory University

Yevgeniy Vorobeychik

Vanderbilt University - Department of Electrical Engineering and Computer Science

Myrna H. Wooders

Vanderbilt University - College of Arts and Science - Department of Economics

Date Written: October 10, 2017

Abstract

We model decentralized team formation as a game in which players make offers to potential teams whose members then either accept or reject the offers. The games induce no-delay subgame perfect equilibria with unique outcomes that are individually rational and match soulmates. We provide sufficient conditions for equilibria to implement core coalition structures, and show that when each player can make a sufficiently large number of proposals, outcomes are Pareto optimal. We then design a mechanism to implement equilibrium of this game and provide sufficient conditions to ensure that truthful reporting of preferences is a strong ex post Nash equilibrium. Moreover, we show empirically that players rarely have an incentive to misreport preferences more generally. Furthermore, for the problem with cardinal preferences, we show empirically that the resulting mechanism results in significantly higher social welfare than serial dictatorship, and the outcomes are highly equitable.

Keywords: Team Formation, Coalition Formation, Mechanism Design, Subgame Perfection, Pareto Optimality

JEL Classification: C72, C63, C71, C78, C62

Suggested Citation

Chambers, Matthew and Hajaj, Chen and Leo, Greg and Lou, Jian and Van der Linden, Martin and Vorobeychik, Yevgeniy and Wooders, Myrna H., Non-Cooperative Team Formation and a Team Formation Mechanism (October 10, 2017). Available at SSRN: https://ssrn.com/abstract=3054771 or http://dx.doi.org/10.2139/ssrn.3054771

Matthew Chambers

Vanderbilt University, College of Arts and Science, Department of Economics, Students ( email )

Box 1819 Station B
Nashville, TN 37235
United States

Chen Hajaj

Vanderbilt University - Department of Electrical Engineering and Computer Science ( email )

Nashville, TN
United States

Greg Leo

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

Box 1819 Station B
Nashville, TN 37235
United States

Jian Lou

Vanderbilt University, Department of Electrical Engineering and Computer Science, Students ( email )

Nashville, TN
United States

HOME PAGE: http://www.jian-lou.com

Martin Van der Linden

Emory University ( email )

201 Dowman Drive
Atlanta, GA 30322
United States

Yevgeniy Vorobeychik (Contact Author)

Vanderbilt University - Department of Electrical Engineering and Computer Science ( email )

Nashville, TN
United States

Myrna H. Wooders

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

Box 1819 Station B
Nashville, TN 37235
United States

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