Abstract
We consider three-sided coalition formation problems when each agent is concerned about his local status as measured by his relative rank position within the group of his own type and about his global status as measured by the weighted sum of the average rankings of the other types of groups. We show that a core stable coalition structure always exists, provided that the corresponding weights are balanced and each agent perceives the two types of status as being substitutable.
Highlights
The dependence of an agent’s utility on the identity of the members of his or her coalition was recognized in the seminal paper of [1], and formally introduced as a hedonic coalition formation game by [2,3]
In this paper we extend the hedonic coalition formation model by distinguishing between three different types of players and allowing for agents’ preferences to be type-dependent
We study the existence of coalition structures that are immune against coalitional deviations
Summary
The dependence of an agent’s utility on the identity of the members of his or her coalition was recognized in the seminal paper of [1], and formally introduced as a hedonic coalition formation game by [2,3]. It is not surprising that in the more general game we consider, suitable preference restrictions are needed to show the existence of a core stable coalition structure. We show that if global status is weighted in a balanced way, a core stable coalition structure always exists.
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