Bidding for the surplus: A non-cooperative approach to the Shapley value

David Pérez-Castrillo, David Wettstein

Research output: Contribution to journalArticlepeer-review

123 Scopus citations

Abstract

We propose a simple mechanism to determine how the surplus generated by cooperation is to be shared in zero-monotonic environments with transferable utility. The mechanism consists of a bidding stage followed by a proposal stage. We show that the subgame perfect equilibrium outcomes of this mechanism coincide with the vector of the Shapley value payoffs. We extend our results to implement the weighted Shapley values. Finally, we generalize our mechanism to handle arbitrary transferable utility environments. The modified mechanism generates an efficient coalition structure, and implements the Shapley values of the super-additive cover of the environment. Journal of Economic Literature Classification Numbers: C71, C72.

Original languageEnglish
Pages (from-to)274-294
Number of pages21
JournalJournal of Economic Theory
Volume100
Issue number2
DOIs
StatePublished - 1 Jan 2001

Keywords

  • Coalition formation
  • Implementation
  • Shapley value
  • Simple mechanism

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'Bidding for the surplus: A non-cooperative approach to the Shapley value'. Together they form a unique fingerprint.

Cite this