model of social choice, Gibbard (1973) and Satterthwaite (1975) show that – provided there are more than two alternatives at stake– every strategy-proof social choice rule is dictatorial. However, reasonable strategy-proof rules exist if appropriate restrictions are imposed on agents’ preferences. In coalition formation problems, such domain For further references, see the recent works by Baner...

We study coalition formation problems with externalities. prove that, if expectations are not prudent a stable coalitions structure may fail to exist. Under and efficient exists the set of admissible is single-lapping. However, under this assumption singleton, no strategy-proof revelation mechanism exists, differently from case without Finally, correspondence Nash implementable.