Date of Original Version

2-2007

Type

Article

Abstract or Description

A natural extension of superadditivity is not sufficient to imply that the grand coalition is efficient when externalities are present. We provide a condition, analogous to convexity, that is sufficient for the grand coalition to be efficient and show that this also implies that the (appropriately de…fined) core is nonempty. Moreover, we propose a mechanism which implements the most efficient partition for all coalition formation games and characterize the resulting payoff division.

DOI

10.1016/j.geb.2007.01.009

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Published In

Games and Economic Behavior , 61, 2, 242-258.