Template-type: ReDif-Paper 1.0
Author-Name: Herings,P. Jean-Jacques
Author-Name: Laan, van der,Gerard
Author-Name: Talman,Dolf
Author-workplace-name: METEOR
Title: Socially Structured Games and Their Applications
Abstract: In this paper we generalize the concept of a non-transferable utility game by introducing the concept of a socially structured game. A socially structured game is given by a set of players, a possibly empty collection of internal organizations on any subset of players, for any internal organization a set of attainable payoffs and a function on the collection of all internal organizations measuring the power of every player within the internal organization. Any socially structured game induces a non-transferable utility game. In the derived non-transferable utility game, all information concerning the dependence of attainable payoffs on the internal organization gets lost. We show this information to be useful for studying non-emptiness and refinements of the core.For a socially structured game we generalize the concept of π-balancedness to social stability and show that a socially stable game has a non-empty socially stable core. In order to derive this result, we formulate a new intersection theorem that generalizes the KKM-Shapley intersection theorem. The socially stable core is a subset of the core of the game. We give an example of a socially structured game that satisfies social stability, whose induced non-transferable utility game therefore has a non-empty core, but does not satisfy π-balanced for any choice of πThe usefulness of the new concept is illustrated by some applications and examples. In particular we define a socially structured game, whose unique element of the socially stable core corresponds to the Cournot-Nash equilibrium of a Cournot duopoly. This places the paper in the Nash research program, looking for a unifying approach to cooperative and non-cooperative behavior in which each theory helps to justify and clarify the other. 
Keywords: microeconomics ; 
Series: Research Memoranda
Creation-Date: 2003
Number: 024
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:60f008d9-ba64-4bbd-a5e0-5333e1aa147a/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 332562
Handle: RePEc:unm:umamet:2003024