Abstract
We generalize the notion of Ichiishi (Econometrica 49(2):369–377, 1981)’s social coalitional equilibrium to a multi-layered coalition structure with parameters, in which agents can incorporate simultaneously multiple coalition structures with multiple independent coalition-deviation opportunities. For each opportunity, agents play a social coalitional equilibrium (SCE) game, called a sub-parametric SCE game, constrained by external environment (parameters and joint decisions of all other sub-parametric SCE games). The generalized social coalitional equilibrium (GSCE) concept is, therefore, considered to be a synthesis of the Nash equilibrium concept and the cooperative solution concept. We provide the definition of GSCE and give the proof of existence theorem. Through some applications to general equilibrium models, the GSCE concept provides a conceptual framework for describing coexisting different industries having independent investment opportunities and their simultaneously determined industrial organizations.
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We would like to thank the editor Nicholas Yannelis, the associate editor V. Filipe Martins-da-Rocha, and an anonymous referee of Economic Theory Bulletin for their useful and inspirational suggestions and comments which encouraged us to further improve the paper. We are grateful to Kohei Shiozawa (Takasaki City University of Economics) who was a co-author of an early draft. We also thank the seminar participants at the JSME conference (Nagoya, November 2020), especially Makoto Hanazono (Nagoya University) for his helpful comments. This work was supported by JSPS KAKENHI Grant Numbers JP20K13461 and JP20H03912.
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Urai, K., Murakami, H. & Chen, W. Generalization of the social coalitional equilibrium structure. Econ Theory Bull 11, 1–25 (2023). https://doi.org/10.1007/s40505-023-00242-w
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DOI: https://doi.org/10.1007/s40505-023-00242-w
Keywords
- Social coalitional equilibrium
- Coalition production economy
- Multi-layered coalition structures
- Firm formation
- Industrial organization structure