The Stability of Hedonic Coalition Structures

We consider the partitioning of a society into coalitions in purely hedonic settings; i.e., where each player's payo is completely determined by the identity of other members of her coalition. We rst discuss how hedonic and non-hedonic settings di er and some su cient conditions for the existence of core stable coalition partitions in hedonic settings. We then focus on a weaker stability condition: individual stability, where no player can bene t from moving to another coalition while not hurting the members of that new coalition. We show that if coalitions can be ordered according to some characteristic over which players have single-peaked preferences, or where players have symmetric and additively separable preferences, then there exists an individually stable coalition partition. Examples show that without these conditions, individually stable coalition partitions may not exist. We also discuss some other stability concepts, and the incompatibility of stability with other normative properties.