An Egalitarian Value for Cooperative Games with Incomplete Information

Andrés Salamanca Lugo

No 16-620, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: A bargaining solution concept generalizing the Harsanyi NTU value is defined for cooperative games with incomplete information. Our definition of a cooperative solution implies that all coalitional threats are equitable when players make interpersonal utility comparisons in terms of some virtual utility scales. In contrast, Myerson’s (1984b) generalization of the Shapley NTU value is only equitable for the grand coalition. When there are only two players, the two solutions are easily seen to coincide, however they may differ for general n-person games. By using the concept of virtual utility, our bargaining solution reflects the fact that players negotiate at the interim stage.

Keywords: Cooperative games; incomplete information; virtual utility (search for similar items in EconPapers)
JEL-codes: C71 C78 D82 (search for similar items in EconPapers)
Date: 2016-02, Revised 2017-04
New Economics Papers: this item is included in nep-gth, nep-hpe, nep-mic and nep-upt
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