Abstract
This paper reinterprets the γ-core (Chander and Tulkens in Int Tax Pub Financ 2:279-293, 1995; in Int J Game Theory 26:379-401, 1997) and jus- tifies it as well as its prediction that the efficient coalition structure is stable in terms of the coalition formation theory. The problem of coalition formation is formulated as an infinitely repeated game in which the players must choose whether to cooperate or not. It is shown that a certain equilibrium of this game correspondstothe γ-coreassumptionthatwhenacoalitionformstheremaining players form singletons, and that the grand coalition is an equilibrium coalition structure. JEL Classification numbers C71, C72, D62
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