The Myopic Stable Set for Social Environments (RM/17/002-revised)

Thomas Demuynck, P. Jean-Jacques Herings, Riccardo Saulle, Christian Seel

Research output: Working paperProfessional

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Abstract

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 non-empty; with the set of stable matchings in the Gale-Shapley matching model; with the set of Pareto optimal allocations in the Shapley-Scarf housing matching model; with the set of pairwise stable networks and closed cycles in models of network formation; with the set of pure strategy Nash equilibria in pseudo-potential games and finite supermodular games; and with the set of mixed strategy Nash equilibria in several classes of two-player games.
Original languageEnglish
PublisherMaastricht University, Graduate School of Business and Economics
Publication statusPublished - 1 Feb 2018

Publication series

SeriesGSBE Research Memoranda
Number001

JEL classifications

  • c70 - Game Theory and Bargaining Theory: General
  • c71 - Cooperative Games

Keywords

  • Social environments
  • group formation
  • stability
  • Nash equilibrium

Cite this

Demuynck, T., Herings, P. J-J., Saulle, R., & Seel, C. (2018). The Myopic Stable Set for Social Environments (RM/17/002-revised). Maastricht University, Graduate School of Business and Economics. GSBE Research Memoranda, No. 001