Decentralized Coalition Formation

Abstract

In this paper we study a simple coalition formation model in which each player has a preference ordering over the possible coalitions. The main question that we are interested in is whether, given an initial arbitrary coalition structure, if we use a decentralized process which allows for a randomly selected coalition to form when it is desired by all of its members (a blocking coalition), will we eventually arrive at a coalition structure for which no such blocking coalition exists, and hence the coalition structure is stable? We identify all coalition configurations for which this decentralized coalition formation process leads to a stable coalition structure, based on a graph theoretic representation of coalition formation.

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