1-convex extensions of incomplete cooperative games and the average value

Jan Bok () and Martin Černý ()
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Martin Černý: Charles University

Theory and Decision, 2024, vol. 96, issue 2, No 3, 239-268

Abstract: Abstract The model of incomplete cooperative games incorporates uncertainty into the classical model of cooperative games by considering a partial characteristic function. Thus the values for some of the coalitions are not known. The main focus of this paper is 1-convexity under this framework. We are interested in two heavily intertwined questions. First, given an incomplete game, how can we fill in the missing values to obtain a complete 1-convex game? Second, how to determine in a rational, fair, and efficient way the payoffs of players based only on the known values of coalitions? We illustrate the analysis with two classes of incomplete games—minimal incomplete games and incomplete games with defined upper vector. To answer the first question, for both classes, we provide a description of the set of 1-convex extensions in terms of its extreme points and extreme rays. Based on the description of the set of 1-convex extensions, we introduce generalisations of three solution concepts for complete games, namely the $$\tau $$ τ -value, the Shapley value and the nucleolus. For minimal incomplete games, we show that all of the generalised values coincide. We call it the average value and provide different axiomatisations. For incomplete games with defined upper vector, we show that the generalised values do not coincide in general. This highlights the importance and also the difficulty of considering more general classes of incomplete games.

Keywords: Cooperative games; Incomplete cooperative games; Uncertainty; 1-Convexity; Solution concepts; Values; Tau-value; Shapley value; Nucleolus (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11238-023-09946-8

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