Maximality in the Farsighted Stable Set

Debraj Ray, Rajiv Vohra

    Research output: Contribution to journalArticle

    Abstract

    Harsanyi (1974) and Ray and Vohra (2015) extended the stable set of von Neumann and Morgenstern to impose farsighted credibility on coalitional deviations. But the resulting farsighted stable set suffers from a conceptual drawback: while coalitional moves improve on existing outcomes, coalitions might do even better by moving elsewhere. Or other coalitions might intervene to impose their favored moves. We show that every farsighted stable set satisfying some reasonable and easily verifiable properties is unaffected by the imposition of these stringent maximality constraints. The properties we describe are satisfied by many, but not all, farsighted stable sets.

    Original languageEnglish (US)
    Pages (from-to)1763-1779
    Number of pages17
    JournalEconometrica
    Volume87
    Issue number5
    DOIs
    StatePublished - Sep 1 2019

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    Stable set
    Deviation
    Credibility

    Keywords

    • farsightedness
    • history-dependent expectations
    • maximality
    • Stable sets

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Maximality in the Farsighted Stable Set. / Ray, Debraj; Vohra, Rajiv.

    In: Econometrica, Vol. 87, No. 5, 01.09.2019, p. 1763-1779.

    Research output: Contribution to journalArticle

    Ray, D & Vohra, R 2019, 'Maximality in the Farsighted Stable Set', Econometrica, vol. 87, no. 5, pp. 1763-1779. https://doi.org/10.3982/ECTA16047
    Ray, Debraj ; Vohra, Rajiv. / Maximality in the Farsighted Stable Set. In: Econometrica. 2019 ; Vol. 87, No. 5. pp. 1763-1779.
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