On coalition-proof Nash equilibria in common agency games

In this paper we consider two notions of a coalitional deviation: strict deviation, where each of member of a deviating group is better off, and weak deviation, where at least one member of a deviating group is better off while all other members are at least as well off. We then examine, for the class of common agency games introduced in Bernheim and Whinston (Quart. J. Econ. 101 (1986), 1-31), the structure and properties of two notions of a coalition-proof Nash equilibrium, generated by strict and weak deviation. We also study a relationship between coalition-proof equilibria, strong equilibria, and Pareto undominated Nash equilibria. (C) 1999 Academic Press.