Efficiency and Stability in a Process of Teams Formation

Boncinelli, Leonardo and Pin, Paolo (2014): Efficiency and Stability in a Process of Teams Formation.

Abstract

We analyze a team formation process that generalizes matching models and network formation models, allowing for overlapping teams of heterogeneous size. We apply different notions of stability: myopic team-wise stability, which extends to our setup the concept of pair-wise stability, coalitional stability, where agents are perfectly rational and able to coordinate, and stochastic stability, where agents are myopic and errors occur with vanishing probability. We find that, in many cases, coalitional stability in no way refines myopic team-wise stability, while stochastically stable states are feasible states that maximize the overall number of activities performed by teams.

• Item Type: MPRA Paper
• Language: English
• Keywords: team formation; stochastic stability; coalitional stability; networks; marriage theorem.
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C73 - Stochastic and Dynamic Games ; Evolutionary Games ; Repeated Games; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D85 - Network Formation and Analysis: Theory; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods

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