Econometrica: Sep 2019, Volume 87, Issue 5
Maximality in the Farsighted Stable Set
Debraj Ray, Rajiv Vohra
Harsanyi (1974) and Ray and Vohra (2015) extended the stable set of von Neumann and Morgenstern to impose farsighted credibility on coalitional deviations. But the resulting farsighted stable set suffers from a conceptual drawback: while coalitional moves improve on existing outcomes, coalitions might do even better by moving elsewhere. Or other coalitions might intervene to impose their favored moves. We show that every farsighted stable set satisfying some reasonable and easily verifiable properties is unaffected by the imposition of these stringent maximality constraints. The properties we describe are satisfied by many, but not all, farsighted stable sets.
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Supplement to "Maximality in the Farsighted Stable Set"
This appendix contains material not found within the manuscript.
Corrigendum to "Maximality in the Farsighted Stable Set"
Lemma 1 of Ray and Vohra (2019) is false as stated, but holds under alternative conditions which are consistent with the ideas of coalitional sovereignty that motivate the cited paper.