Grand Coalition

Definition

A grand coalition refers to a coalition formed by multiple parties or groups that come together to achieve a common goal, often in cooperative game theory contexts. This coalition typically consists of all or nearly all players within a game, aiming to maximize the overall benefits for its members. The concept emphasizes cooperation and collective strategy, often contrasted with smaller or more exclusive coalitions that may lead to conflict or competitive dynamics.

5 Must Know Facts For Your Next Test

1. In a grand coalition, all players collaborate, which can lead to higher collective payoffs compared to individuals acting alone.
2. The grand coalition is often seen as the most efficient form of cooperation, as it encompasses a broad base of participants and resources.
3. To form a grand coalition, players must negotiate and agree on how to share the benefits generated by their collective efforts.
4. The stability of a grand coalition can be influenced by external factors, such as changes in the environment or the emergence of new players.
5. Grand coalitions are essential for solving issues that require consensus, like political agreements or large-scale economic initiatives.

Review Questions

• How does a grand coalition differ from smaller coalitions in terms of efficiency and outcomes?
  • A grand coalition typically achieves greater efficiency than smaller coalitions because it includes all or nearly all players who can combine their resources and strategies for mutual benefit. This larger collaboration leads to maximized total payoffs, as every member contributes to and shares in the gains. In contrast, smaller coalitions may limit potential benefits due to fewer participants and could foster competition among excluded players, leading to lower overall outcomes.
• Discuss the role of the characteristic function in understanding the value generated by a grand coalition.
  • The characteristic function is crucial for assessing how much value a grand coalition can generate. It assigns a value to each possible coalition, reflecting the total worth that players can achieve together. In the context of a grand coalition, this function helps determine how to distribute the total value among all participants fairly. By analyzing these values, players can make informed decisions about forming coalitions and negotiating agreements that maximize their individual and collective benefits.
• Evaluate the implications of forming a grand coalition on the stability and longevity of cooperative relationships among players.
  • Forming a grand coalition can significantly enhance stability and longevity in cooperative relationships among players. When players collaborate on common goals, they build trust and interdependence, making it more likely for them to maintain their alliances over time. However, this stability can be threatened if some members perceive unfairness in how benefits are shared or if external factors disrupt the coalition's objectives. Thus, ensuring equitable distribution of gains and adapting to changes in the environment are key for sustaining the cooperative spirit within a grand coalition.

Related terms

Cooperative Game: A type of game where players can benefit from forming coalitions and can negotiate binding agreements to enhance their outcomes.

Characteristic Function: A function that assigns a value to each possible coalition in a cooperative game, representing the total worth or benefit that the coalition can achieve together.

Shapley Value: A solution concept in cooperative game theory that fairly distributes the total gains from cooperation among players based on their individual contributions.