Stabilizing Welfare-Maximizing Decisions via Endogenous Transfers

TL;DR

This paper introduces a framework for stable, welfare-maximizing decision-making in multiagent systems using endogenous transfers, ensuring coalition stability and efficiency through strategic utility redistribution.

Contribution

It demonstrates the existence of stable equilibria under consensus rules and provides conditions for stability in more general rules, bridging cooperative and noncooperative approaches.

Findings

IR-SNE always exist under consensus rules

Efficient algorithms for constructing equilibria

Transfers can restore stability and efficiency

Abstract

Many multiagent systems rely on collective decision-making among self-interested agents, which raises deep questions about coalition formation and stability. We study social choice with endogenous, outcome-contingent transfers, where agents voluntarily form contracts that redistribute utility depending on the collective decision, allowing fully strategic, incentive-aligned coalition formation. We show that under consensus rules, individually rational strong Nash equilibria (IR-SNE) always exist, implementing welfare-maximizing outcomes with feasible transfers, and provide a simple, efficient algorithm to construct them. For more general anonymous, monotonic, and resolute rules, we identify necessary conditions for profitable deviations, sharply limiting destabilizing coalitions. By bridging cooperative and noncooperative perspectives, our approach shows that transferable utility can achieve core-like stability, restoring efficiency and budget balance even where classical impossibility results apply. Overall, this framework offers a practical and robust way to coordinate large-scale strategic multiagent systems.