(with Hideo Konishi), Journal of Economic Theory 110, 1–41, 2003.
Summary. We study coalition formation as an ongoing, dynamic process, with payoffs generated as coalitions form, disintegrate, or regroup.
Professor of Economics, New York University
Research Associate, NBER
Part-Time Professor, University of Warwick
Research Fellow, CESifo
Spool Member, ThReD
Department of Economics,
New York University,
19 West 4th Street
New York, NY 10012, U.S.A.
debraj.ray@nyu.edu, +1 (212)-998-8906.
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Oxford University Press, 2008. This book is now open-access; feel free to download a copy, and to buy the print version if you like the book.
⟳ Re-randomize
Coalition Formation with Binding Agreements
(with Kyle Hyndman), Review of Economic Studies 74, 1125–1147, 2007.
Summary. We study coalition formation in “real time”, a situation in which coalition formation is intertwined with the ongoing receipt of payoffs. Agreements are assumed to be permanently binding: They can only be altered with the full consent of existing signatories. For characteristic function games we prove that equilibrium processes—whether or not these are history dependent—must converge to efficient absorbing states. For three-player games with externalities each player has enough veto power that a general efficiency result can be established. However, there exist four-player games in which all Markov equilibria are inefficient from every initial condition, despite the ability to write permanently binding agreements. Online Appendix.
The Farsighted Stable Set
(with Rajiv Vohra), Econometrica 83, 977–1011, 2015. Online Appendix.
Summary. We propose a definition of farsighted stability in coalitional games, in the spirit of von Neumann-Morgenstern stability and its modification by Harsanyi. We provide a necessary and sufficient condition for the existence of a farsighted stable set containing just a single-payoff allocation. We then conduct a comprehensive analysis of the existence and structure of farsighted stable sets in simple games.