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Values for environments with externalities – The average approach

Ines Macho-Stadler (), David Perez-Castrillo () and David Wettstein

Games and Economic Behavior, 2018, vol. 108, issue C, 49-64

Abstract: We propose the “average approach,” where the worth of a coalition is a weighted average of its worth for different partitions of the players' set, as a unifying method to extend values for characteristic function form games. Our method allows us to extend the equal division value, the equal surplus value, the consensus value, the λ-egalitarian Shapley value, and the family of least-square values. For each of the first three extensions, we also provide an axiomatic characterization of a particular value for partition function form games. And for each of the last two extensions, we find a family of values that satisfy the properties.

Keywords: Externalities; Sharing the surplus; Average approach (search for similar items in EconPapers)
JEL-codes: D62 C71 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Values for Environments with Externalities - The Average Approach (2016) Downloads
Working Paper: Values for Environments with Externalities - The Average Approach (2016) Downloads
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