The Myopic Stable Set for Social Environments

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 nonempty; with the set of stable matchings in the Gale-Shapley matching model; with the set of pairwise stable networks and closed cycles in models of network formation; and with the set of pure strategy Nash equilibria in pseudo-potential games and finite supermodular games. We also characterize the MSS for the class of proper simple games.