Information within coalitions: risk and ambiguity

Abstract

We address economies with asymmetric information where agents are not perfectly aware of the informational structure for coalitions. Thus, when joining a coalition, each consumer considers the informational risk and may be uncertain about the prior relevant to her decision. In this context, we introduce cooperative solutions that we refer to as risky core, ambiguous core, and meu-core. We provide existence results and a variety of properties of these concepts, including their coalitional incentive compatibility. We also formalize the intuition that the blocking power of coalitions is increasing with their information but decreasing with the degree of risk or ambiguity aversion faced by their members.