Efficiency and Stability in a Process of Teams Formation

TL;DR

This paper investigates a generalized team formation process inspired by scientific coauthorship data, analyzing stability concepts and their implications for team efficiency and coordination.

Contribution

It introduces a generalized model of team formation with overlapping, heterogeneous teams and compares multiple notions of stability within this framework.

Findings

Coalitional stability often does not refine myopic team-wise stability.

Stochastically stable states maximize overall team activities.

Different stability notions have distinct implications for team efficiency.

Abstract

Motivated by data on coauthorships in scientific publications, we analyze a team formation process that generalizes matching models and network formation models, allowing for overlapping teams of heterogeneous size. We apply different notions of stability: myopic team-wise stability, which extends to our setup the concept of pair-wise stability, coalitional stability, where agents are perfectly rational and able to coordinate, and stochastic stability, where agents are myopic and errors occur with vanishing probability. We find that, in many cases, coalitional stability in no way refines myopic team-wise stability, while stochastically stable states are feasible states that maximize the overall number of activities performed by teams.