The Covid-19 epidemic highlighted the significance of externalities: contacts with other people affect the chances of getting infected for our entire network. We study endogenous network formation where not only players or pairs but larger coalitions can, cooperatively change the network. We introduce a model for coalitional network stability for networks with widespread externalities. The network function form generalises the partition function form of cooperative games in allowing the network to be taken into account. The recursive core for network function form games generalises the recursive core for such environments. We present two simple examples to illustrate positive and negative externalities. The first is of a favour network and show that the core is nonempty when players must pay transfers to intermediaries; this simple setting also models economic situations such as airline networks. The second models social contacts during an epidemic and finds social bubbles as the solution.
Kóczy, L.Á. Core-stability over networks with widespread externalities. Ann Oper Res (2022). https://doi.org/10.1007/s10479-022-04669-5
Debates on an EU-leaving referendum arose in several member states after Brexit. This paper studies the effects of an additional exit on the power distribution in the Council of the European Union. Power indices of the member states are studied both with and without the country which might leave the union. Results show a pattern connected to a change in the number of states required to meet the 55% threshold. An exit that modifies this number benefits the countries with high population, while an exit that does not cause such a change benefits the small member states. According to the calculations, only the exit of Poland would be supported by the qualified majority of the Council.
Petróczy, D.G.; Rogers, M.F.; Kóczy, L.Á. Exits from the European Union and Their Effect on Power Distribution in the Council. Games2022, 13, 18. https://doi.org/10.3390/g13010018
László Á. Kóczy presented his paper Network Disruptions and the Security of Supply in the European Gas Network (joint with Balázs Sziklai and Dávid Csercsik) at the 20th Journées Louis-André Gérard-Varet, Marseille, France on 21-25 June 2021.
The paper titled Brexit and Power in the Council of the European Union discusses the impact of Brexit on voting in the Council of the European Union. There is a remarkably sharp relation between population size and the change in power: Brexit increases the largest members’ powers while decreasing the smallest ones’ powers.
László Á. Kóczy presented his paper Power and preferences (joint with Balázs Sziklai) at the PPE Conference on Social Choice and Voting Theory, hosted by the Kellog Centre for Philosophy, Politics and Economics, Virginia Tech on 17-19 June 2021.
In the paper titled The equivalence of the minimal dominant set and the myopic stable set for coalition function form games (co-authored with P. Jean-Jacques Herings) published in Games and Economic Behavior, the equivalence of two dynamic cooperative game theoretic concepts, the minimal dominant set and the myopic stable set is studied and the modifications needed for equivalence are presented.