Working paper

A Game-Theoretical Model of the Landscape Theory

Michel Le Breton, Alexander Shapoval, and Shlomo Weber

Abstract

In this paper we examine a game-theoretical generalization of the landscape theory introduced by Axelrod and Bennett (1993). In their two-bloc setting each player ranks the blocs on the basis of the sum of her individual evaluations of members of the group. We extend the Axelrod-Bennett setting by allowing an arbitrary number of blocs and expanding the set of possible deviations to include multi-country gradual deviations. We show that a Pareto optimal landscape equilibrium which is immune to profitable gradual deviations always exists. We also indicate that while a landscape equilibrium is a stronger concept than Nash equilibrium in pure strategies, it is weaker than strong Nash equilibrium.

Keywords

Landscape theory; landscape equilibrium; blocs; gradual deviation; potential functions; hedonic games.;

Reference

Michel Le Breton, Alexander Shapoval, and Shlomo Weber, A Game-Theoretical Model of the Landscape Theory, TSE Working Paper, n. 20-1113, June 2020.

See also

Published in

TSE Working Paper, n. 20-1113, June 2020