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Coalitional stability in the location problem with single-dipped preferences: An application of the minimax theorem |
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| Institution: | 1. Department of Economics, University of Rochester, Rochester, NY 14627, USA;2. Department of Economics, Vanderbilt University, Nashville, TN 37235, USA;3. College of Administrative Sciences and Economics, Koç University, Sar?yer, Istanbul, 34450, Turkey;1. Department of Statistics, Forecasting, Mathematics, Faculty of Economics and Business Administration, Babe?-Bolyai University, Cluj Napoca, Romania;2. Department of Economics, University Carlos III of Madrid, Calle Madrid 126, 28903-Getafe (Madrid), Spain;3. Department of Business and Economics and COHERE, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark |
| Abstract: | This study considers a situation in which agents choose the location of a public facility from a street according to a given mechanism. Agents have single-dipped preferences over a set of feasible locations. We analyze coalitional behavior for any given mechanism for this situation. We identify a necessary and sufficient condition for a mechanism to possess a strong Nash equilibrium by applying the minimax theorem of von Neumann and Morgenstern (1944). We introduce a class of core solutions and show that these solutions are characterized by strong Nash implementability. As a byproduct of these results, we propose a simple mechanism that implements any core solution in strong Nash equilibria. |
| Keywords: | Single-dippedness Strong Nash equilibrium Minimax theorem Core solution Strong Nash implementation |
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