Economics at your fingertips  

Marginality, dividends, and the value in games with externalities

Frank Huettner and André Casajus
Additional contact information
Frank Huettner: ESMT Berlin
André Casajus: HHL Leipzig Graduate School of Management

No ESMT-19-01, ESMT Research Working Papers from ESMT European School of Management and Technology

Abstract: In the absence of externalities, marginality is equivalent to an independence property that rests on Harsanyi‘s dividends. These dividends identify the surplus inherent to each coalition. Independence states that a player‘s payoff stays the same if only dividends of coalitions to which this player does not belong to change. We introduce notions of marginality and independence for games with externalities. We measure a player‘s contribution in an embedded coalition by the change in the worth of this coalition that results when the player is removed from the game. We provide a characterization result using efficiency, anonymity, and marginality or independence, which generalizes Young‘s characterization of the Shapley value. An application of our result yields a new characterization of the solution put forth by Macho-Stadler et al. (J Econ Theor, 135, 2007, 339-356) without linearity, as well as for almost all generalizations put forth in the literature. The introduced method also allows us to investigate egalitarian solutions and to reveal how accounting for externalities may result in a deviation from the Shapley value. This is exemplified with a new solution that is designed in a way to not reward external effects, while at the same time it cannot be assumed that any partition is the default partition.

Keywords: Shapley value; potential; restriction operator; partition function form game; externalities (search for similar items in EconPapers)
JEL-codes: C71 D60 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2019-05-27
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) First version, 2019 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in ESMT Research Working Papers from ESMT European School of Management and Technology Contact information at EDIRC.
Bibliographic data for series maintained by ESMT Faculty Publications ().

Page updated 2019-06-22
Handle: RePEc:esm:wpaper:esmt-19-01