Values for environments with externalities – The average approach

Inés Macho-Stadler, David Pérez-Castrillo, David Wettstein

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

We propose the “average approach,” where the worth of a coalition is a weighted average of its worth for different partitions of the players' set, as a unifying method to extend values for characteristic function form games. Our method allows us to extend the equal division value, the equal surplus value, the consensus value, the λ-egalitarian Shapley value, and the family of least-square values. For each of the first three extensions, we also provide an axiomatic characterization of a particular value for partition function form games. And for each of the last two extensions, we find a family of values that satisfy the properties.

Original languageEnglish
Pages (from-to)49-64
Number of pages16
JournalGames and Economic Behavior
Volume108
DOIs
StatePublished - 1 Mar 2018

Keywords

  • Average approach
  • Externalities
  • Sharing the surplus

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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