Coral Games and the Core of Cores

Abstract

Many economically and politically important groups are themselves comprised of groups. Examples of such multi-level group structures include coalition governments, labor confederations and research consortia. In this paper, a model of multi-level group structures and an equilibrium concept are developed. The results establish that individu- als and groups will make tradeo®s across levels of the overall structure. Therefore, overall stability and overall instability can both arise from any combination of stable and unsta- ble levels. The framework and results have applications in many ¯elds, including political economy, industrial organization, and environmental economics.