A coalition formation value for games with externalities

Michel Grabisch and Yukihiko Funaki ()

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: The coalition formation problem in an economy with externalities can be adequately modeled by using games in partition function form (PFF games), proposed by Thrall and Lucas. If we suppose that forming the grand coalition generates the largest total surplus, a central question is how to allocate the worth of the grand coalition to each player, i.e., how to find an adequate solution concept, taking into account the whole process of coalition formation. We propose in this paper the original concepts of scenario-value, process-value and coalition formation value, which represent the average contribution of players in a scenario (a particular sequence of coalitions within a given coalition formation process), in a process (a sequence of partitions of the society), and in the whole (all processes being taken into account), respectively. We give an application to Cournot oligopoly, and two axiomatizations of the scenario-value.

Keywords: Coalition formation; games in partition function form; solution concept; Cournot oligopoly.; Formation de coalition; jeu en forme de fonction de partition; concept de solution; oligopolie de Cournot. (search for similar items in EconPapers)
Date: 2011-05
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00344797v2
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Published in 2011

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Related works:
Working Paper: A coalition formation value for games with externalities (2011)
Working Paper: A coalition formation value for games with externalities (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00344797

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