Abstract:

      Farsighted formulations of coalitional formation, for instance by Harsanyi (1974) and Ray and Vohra(2015), have typically been based on the von Neumann- Morgenstern (1944) stable set. These farsighted stable sets use a notion of indirect dominance in which an outcome can be dominated by a chain of coalitional ‘moves’ in which each coalition that is involved in the sequence eventually stands to gain. Dutta and Vohra(2016) point out that these solution concepts do not require coalitions to make op- timal moves. Hence, these solution concepts can yield unreasonable predictions. Dutta and Vohra (2016) restricted coalitions to hold common, history independent expecta- tions that incorporate optimality regarding the continuation path. This paper extends the Dutta-Vohra analysis by allowing for history dependent expectations. The paper pro- vides characterization results for two solution concepts corresponding to two versions of optimality. It demonstrates the power of history dependence by establishing non- emptyness results for all finite games as well as transferable utility partition function games. The paper also provides partial comparisons of the solution concepts to other solutions.

Bio Note:

Bhaskar Dutta is Professor of Economics at Ashoka University and University of Warwick. His research interests include Cooperative Game Theory, Mechanism  Design, Formation of Groups and Networks, Social Choice Theory and Development Economics. He has been Professor of Economics at the University of Warwick since 2000.

He has had a long association with the Indian Statistical Institute, where he has taught during 1979 -2002. He has also been a Visiting Professor in several universities including Caltech, Universitat Autonoma de Barcelona, Universite Cergy-Pointoise, Paris, University of Graz. He was winner of the Mahalanobis Memorial Award of the Indian Econometric Society in 1990. He was President of the Society for Social Choice and Welfare (2014-16).  He is also a Fellow of the Econometric Society, and the Society for Advancement of Economic Theory.  He has been Chair, Standing Committee for India and South Asia as well as a member of the Council of the Econometric Society.  He is currently a member of the Council of the Game Theory Society.  He has also served as consultant for the World Bank, UNDP, ILO and ADB.

Prof. Dutta has published extensively in leading journals, applying game-theoretic tools in the areas of mechanism design, cooperative game theory, the economic theory of social networks, and social choice theory.  He is a Managing Editor of Social Choice and Welfare, and Advisory Editor of   Games and Economic Behaviour. He has also edited several books. 

Prof. Dutta did his Bachelor's degree from the University of Calcutta, and his Master’s and Ph.D. in Economics from the University of Delhi.