Constitutions and groups

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Working paper
Author/s: 
Ana Mauleon, Nils Roehl and Vincent Vannetelbosch
Issue number: 
2017/22
Series: 
CORE Discussion Papers
Publisher: 
Center for Operations Research and Econometrics
Year: 
2017
We develop a general theoretical framework that allows us to study the group structures that are going to emerge at equilibrium when individuals are allowed to engage in several groups at the same time. We introduce the notion of constitution in order to model for each group the rules governing both the composition of the group and the conditions needed to leave the group and/or to become a new member of the group. We then propose the concept of constitutional stability to study the group structures that are going to emerge at equilibrium in overlapping coalition settings. This concept generalizes previous stability concepts in the literature in which the constitutional rules were exogenously given or not explicitly considered. We combine requirements on constitutions and preferences for guaranteeing both the existence and the emergence of constitutionally stable group structures. Furthermore, by embedding many-to-many matchings into our setting, we show how these results could be useful to identify the constitutionally stable group structures in this particular environment.
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