New Model Explores Decentralized Coalition Formation Dynamics

This research investigates how groups or coalitions form and dissolve in a decentralized manner. The model proposes that individual agents decide to leave or join coalitions based on their perceived value within their current group, rather than through global negotiations. This framework connects the concepts of cooperative game theory, specifically payoff allocation, with non-cooperative strategic behavior. The study establishes conditions for equilibrium, where no agent can individually profit by changing their coalition status. It also explores how factors like switching costs and acceptance costs influence the stability of these coalition structures. Numerical experiments validate the model's ability to stabilize over time and its sensitivity to these cost parameters.