A one-dimensional model of spatial political competition with endogenous party formation is developed. It is proved that at equilibrium there are only two parties. These parties propose alternatives in the extreme positions of the policy space. The adopted policy, however, is a compromise...

In this note we show that no solution to coalition formation games can satisfy a set of axioms that we propose as reasonable. Our result points out that solutions to the coalition formation cannot be interpreted as predictions of what would be resting points for a game in the way stable...

That individual identity influences economic decision making was convincingly argued by Akerlof and Kranton (2000, 2004). However, as individual identity will commonly be based on the social affiliation with different groups, conflicting interests also concerning identity may arise. This paper...