Renegotiations
Abstract
So far, we have assumed that once players form a coalition, they allocate the coalition worth and exit the game. After that, the other players continue the game. The basic model of coalition formation in Section 5.1 describes a situation where players cannot change their coalitions. This assumption is reasonable when the costs of changing coalitions are high. For example, firms make irreversible investments in building factories and R&D to participate in a joint project. When investments are project-specific, the cost of changing them for a new project may be prohibitively high for firms.
Fields of Study & Subjects
Game Theory and Voting Systems
Game Theory and Applications
Merger and Competition Analysis
Publication details
- Journal / source
- Cambridge University Press eBooks
- Pages
- 193–213
- Publication date
- 14 March 2026
- Language
- EN
- Document type
- Book chapter