A coalition formation value for games with externalities

Michel Grabisch and Yukihiko Funaki ()

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: The coalition formation problem in an economy with externalities can be adequately modeled by using games in partition function form (PFF games), proposed by Thrall and Lucas. If we suppose that forming the grand coalition generates the largest total surplus, a central question is how to allocate the worth of the grand coalition to each player, i.e., how to find an adequate solution concept, taking into account the whole process of coalition formation. We propose in this paper the original concepts of scenario-value, process-value and value, which represent the average contribution of players in a scenario (a particular sequence of coalitions within a given coalition formation process), in a process (a sequence of partitions of the society), and in the whole (all processes being taken into account), respectively. We give an application to Cournot oligopoly, and two axiomatizations of the scenario-value

Keywords: Coalition formation; games in partition function form; solution concept; Cournot oligopoly (search for similar items in EconPapers)
JEL-codes: C71 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2008-11
New Economics Papers: this item is included in nep-gth
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: A coalition formation value for games with externalities (2011)
Working Paper: A coalition formation value for games with externalities (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:b08076

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