Priority relations and cooperation with multiple activity levels

David Lowing and Kevin Techer

Journal of Mathematical Economics, 2022, vol. 102, issue C

Abstract: This paper analyzes cooperation situations between heterogeneous players. It considers two types of heterogeneity. First, the players are differentiated with respect to a priority structure. This structure captures asymmetries between players, which may reflect exogenous rights, different needs, merit, or hierarchical constraints. Second, each player may have different cooperation possibilities represented by a set of activity levels. To analyze these situations, we enrich the model of multi-choice games, which is a natural extension of transferable utility games, with a priority structure. A new value on the class of multi-choice games with a priority structure is introduced. To accommodate the different activity levels and the asymmetries between players, this value follows an allocation process based on a lexicographic procedure. New axioms for multi-choice games with a priority structure are introduced. These axioms endogenously determine the lexicographic procedure used to define the value. Two axiomatic characterizations of this value are provided.

Keywords: Priority structure; Multi-choice games; Lexicographic order; Axiomatic method (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:102:y:2022:i:c:s0304406822000738

DOI: 10.1016/j.jmateco.2022.102740

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