The projective core of symmetric games with externalities

Abstract

The purpose of this paper is to study which coalition structures have stable distributions. We employ the projective core as a stability concept. Although the projective core is often defined only for the grand coalition, we define it for every coalition structure. We apply the core notion to a variety of economic models including the public goods game, the Cournot and Bertrand competition, and the common pool resource game. We use a partition function to formulate these models. We argue that symmetry is a common property of these models in terms of a partition function. We offer some general results that hold for all symmetric partition function form games and discuss their implications in the economic models. We also provide necessary and sufficient conditions for the projective core of the models to be nonempty. In addition, we show that our results hold even in the presence of small perturbations of symmetry.