The Myopic Stable Set for Social Environments

49 Pages Posted: 12 Feb 2018

See all articles by P. Jean-Jacques Herings

P. Jean-Jacques Herings

Maastricht University

Thomas Demuynck

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Riccardo Saulle

University of Padua - Department of Economics and Management

Christian Seel

Maastricht University

Multiple version iconThere are 3 versions of this paper

Date Written: October 26, 2017

Abstract

We introduce a new solution concept for models of coalition formation, called the myopic stable set (MSS). The MSS is defined for a general class of social environments and allows for an infinite state space. An MSS exists and, under minor continuity assumptions, it is also unique.

The MSS generalizes and unifies various results from more specific applications. It coincides with the coalition structure core in coalition function form games when this set is non-empty; with the set of stable matchings in the Gale-Shapley matching model; with the set of Pareto optimal allocations in the Shapley-Scarf housing matching model; with the set of pairwise stable networks and closed cycles in models of network formation; with the set of pure strategy Nash equilibria in pseudo-potential games and finite supermodular games; and with the set of mixed strategy Nash equilibria in several classes of two-player games.

Keywords: Social environments, group formation, stability, Nash equilibrium

JEL Classification: C70, C71

Suggested Citation

Herings, P. Jean-Jacques and Demuynck, Thomas and Saulle, Riccardo and Seel, Christian, The Myopic Stable Set for Social Environments (October 26, 2017). Available at SSRN: https://ssrn.com/abstract=3120456 or http://dx.doi.org/10.2139/ssrn.3120456

P. Jean-Jacques Herings (Contact Author)

Maastricht University ( email )

Department of Economics
P.O. Box 616
6200 MD Maastricht
Netherlands
+31 43 3883636 (Phone)
+31 43 3884878 (Fax)

HOME PAGE: http://www.personeel.unimaas.nl/p.herings/herings.htm

Thomas Demuynck

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

Riccardo Saulle

University of Padua - Department of Economics and Management ( email )

Via del Santo, 33
Padova, 35123
Italy

Christian Seel

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands
0031 433883651 (Phone)

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