What makes some coalitions form successfully while others – like the Kyoto Protocol – run into difficulty?
A new survey by Siddhartha Bandyopadhyay and Kalyan Chatterjee – published in the February 2006 issue of the Economic Journal – reveals some of the insights that game theory brings to understanding the ways in which individuals and organisations can successfully develop and sustain co-operation and why these might not always work.
Coalition formation is pervasive in real world scenarios, including the formation of bidding rings, cartels and political alignment between parties. These researchers analyse the forces behind coalition formation, which captures some of the dynamics of coalition formation.
In particular, they use this analysis to see how well they can explain the diverse political coalitions seen in European parliamentary democracies, for example, that form between parties both before and after elections. They review recent studies that explain delay in negotiations in the formation of coalitions, a feature seen in the time taken to form governments in different countries.
Finally, they sketch a model that provides an explanation for why some types of governments (especially minority governments) are less stable than others as well as why coalitions often form with more members than is strictly necessary.
”Coalition Theory and its Applications” by Siddhartha Bandyopadhyay and Kalyan Chatterjee is published in the February 2006 issue of the Economic Journal. Siddhartha Bandyopadhyay is at the University of Birmingham. Kalyan Chatterjee is at Pennsylvania State University.
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