Uncertainty in cooperative interval games: How Hurwicz criterion compatibility leads to egalitarianism
Lina Mallozzi and
MPRA Paper from University Library of Munich, Germany
We study cooperative interval games. These are cooperative games where the value of a coalition is given by a closed real interval specifying a lower bound and an upper bound of the possible outcome. For interval cooperative games, several (interval) solution concepts have been introduced in the literature. We assume that each player has a different attitude towards uncertainty by means of the so-called Hurwicz coefficients. These coefficients specify the degree of optimism that each player has, so that an interval becomes a specific payoff. We show that a classical cooperative game arises when applying the Hurwicz criterion to each interval game. On the other hand, the same Hurwicz criterion can be also applied to any interval solution of the interval cooperative game. Given this, we say that a solution concept is Hurwicz compatible if the two procedures provide the same final payoff allocation. When such compatibility is possible, we characterize the class of compatible solutions, which reduces to the egalitarian solution when symmetry is required. The Shapley value and the core solution cases are also discussed.
Keywords: Cooperative interval games; Hurwicz criterion; Hurwicz compatibility (search for similar items in EconPapers)
JEL-codes: C71 (search for similar items in EconPapers)
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