Rational Instability in the Natural Coalition Forming

Abstract: We are investigating a paradigm of instability in coalition forming among countries, which indeed is intrinsic to any collection of individual groups or other social aggregations. Coalitions among countries are formed by the respective attraction or repulsion caused by the historical bond propensities between the countries, which produced an intricate circuit of bilateral bonds. Contradictory associations into coalitions occur due to the independent evolution of the bonds. Those coalitions tend to be unstable and break down frequently. The model extends some features of the physical theory of Spin Glasses. Within the frame of this model, the instability is viewed as a consequence of decentralized maximization processes searching for the best coalition allocations. In contrast to the existing literature, a rational instability is found to result from forecast rationality of countries. Using a general theoretical framework allowing to analyze the countries' decision making in coalition forming, we feature a system where stability can eventually be achieved as a result of the maximization processes. We provide a formal implementation of the maximization principles and illustrate it in the multi-thread simulation of the coalition forming. The results shed a new light on the prospect of searches for the best coalition allocations in the networks of social, political or economical entities.