Equivalence Nucleolus for Partition Function Games

In coalitional game theory, the issue of stability in presence of externalities has been given very little attention. Moreover, there is no solution concept in the literature which guarantees non-emptiness of the set of stable outcomes under this environment. Using the partition function form representation, we propose a new solution concept which is unique and always non-empty. It is also proved that if payoff distribution rule is an equivalence relation, nonemptiness is always guaranteed.