COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 974

"A Refined Bargaining Set of an n-Person Game and Endogenous Coalition Formation"

Lin Zhou

April 1991

The two most fundamental questions in cooperative game theory are: When a game is played, what coalitions will be formed and what payoff vectors will be chosen? No previous solution concepts or theories in the literature provide satisfactory answers to both questions; answers are especially lacking for the first one. In this paper we introduce the refined bargaining set, which is the first solution concept in cooperative game theory that simultaneously provides answers to both of the fundamental questions.

JE Classification: C71

Keywords: Cooperative games, game theory, bargaining coalition