A new axiomatization of a class of equal surplus division values for TU games

In this paper, we propose a variation of weak covariance named as non-singleton covariance, requiring that changing the worth of a non-singleton coalition in a TU game affects the payoffs of all players equally. We establish that this covariance is characteristic for the convex combinations of the equal division value and the equal surplus division value, together with efficiency and a one-parameterized axiom treating a particular kind of players specially. As special cases, parallel axiomatizations of the two values are also provided.

The Need for Permission, the Power to Enforce, and Duality in Cooperative Games with a Hierarchy

A cooperative game with transferable utility (TU game) captures a situation in which players can achieve certain payoffs by cooperating. We assume that the players are part of a hierarchy. In the literature, this invokes the assumption that subordinates cannot cooperate without the permission of their superiors. Instead, we assume that superiors can force their subordinates to cooperate. We show how both notions correspond to each other by means of dual TU games. This way, we capture the idea that a superiors’ ability to enforce cooperation can be seen as the ability to neutralize her subordinate’s threat to abstain from cooperation. Moreover, we introduce the coercion value for games with a hierarchy and provide characterizations thereof that reveal the similarity to the permission value.

Bankruptcy Problem Allocations and the Core of Convex Games

A well-known result related to bankruptcy problems establishes that a vector is a bankruptcy allocation if and only if it belongs to the core of the associated O’Neill’s bankruptcy game. In this paper we show that this game is precisely the unique TU-game based on convex functions that satisfies the previous result. In addition, given a bankruptcy problem, we show a way for constructing bankruptcy games such that the set of bankruptcy allocations is a subset of their core or their core is a subset of the set of bankruptcy allocations. Also, we show how these results can be applied for finding new bankruptcy solutions.

LARGENESS OF THE CORE OF k-CONVEX SYMMETRIC GAMES

A cooperative TU game is said to posses a large core as defined by Sharkey [1982] if for every acceptable vector there is a smaller core vector in the game. This paper is devoted to characterization(s) of largeness of the core of a subclass of games known as k-convex games (containing the convex games in case k = n). The k-convex games were defined by Driessen [1988] because of the core structure they possess, which is the same as that of a suitably defined convex game. The main goal is to show that the totally balanced symmetric k-convex games possess a large core if and only if the game is convex.

THE RIVER SHARING PROBLEM: A SURVEY

The river sharing problem deals with the fair distribution of welfare resulting from the optimal allocation of water among a set of riparian agents. Ambec and Sprumont [Sharing a river, J. Econ. Theor. 107, 453–462] address this problem by modeling it as a cooperative TU-game on the set of riparian agents. Solutions to that problem are reviewed in this article. These solutions are obtained via an axiomatic study on the class of river TU-games or via a market mechanism.

COALITIONAL BELIEFS IN COURNOT OLIGOPOLY TU GAMES

In cooperative games, due to computational complexity issues, deviant agents are not able to base their behavior on the outsiders' status but have to follow certain beliefs as to how it is in their strategic interest to act. This behavior constitutes the main interest of this paper. To this end, we quantify and characterize the set of coalitional beliefs that support cooperation of such agents. Assuming that they are engaged in a differentiated Cournot competition, for every belief of the deviants we define a TU-game, the solution to which characterizes the set of coalitional beliefs that support core nonemptiness. For this we fix the number of coalitions that deviants S will face to, say, j in number and introduce the notion of j-belief of S as the least number of coalitions into which the outsiders N\S will reorganize. We then define for every j-belief a TU-game and the j-belief core of it. We prove that the worth of S is minimized when the n – s agents split approximately equally among the j coalitions, while the worth of S is maximized when j – 1 agents have one member and one coalition has n – s – (j – 1) members. Given the above, we prove that when goods are substitutes, the j-belief core is nonempty, provided that S believe the N\S will form a sufficiently large number of coalitions, while when goods are complements, the j-belief core is nonempty irrespective of the beliefs of the agents in S. Finally, in the case of homogeneous goods we prove that the j-belief core is nonempty and depends only on the number of the outsider coalitions and not on their size.

NONEMPTY CORE-TYPE SOLUTIONS OVER BALANCED COALITIONS IN TU-GAMES

In this paper we introduce two related core-type solutions for games with transferable utility (TU-games) the [Formula: see text]-core and the [Formula: see text]-core. The elements of the solutions are pairs [Formula: see text] where x, as usual, is a vector representing a distribution of utility and [Formula: see text] is a balanced family of coalitions, in the case of the [Formula: see text]-core, and a minimal balanced one, in the case of the [Formula: see text]-core, describing a plausible organization of the players to achieve the vector x. Both solutions extend the notion of classical core but, unlike it, they are always nonempty for any TU-game. For the [Formula: see text]-core, which also exhibits a certain kind of "minimality" property, we provide a nice axiomatic characterization in terms of the four axioms nonemptiness (NE), individual rationality (IR), superadditivity (SUPA) and a weak reduced game property (WRGP) (with appropriate modifications to adapt them to the new framework) used to characterize the classical core. However, an additional axiom, the axiom of equal opportunity is required. It roughly states that if [Formula: see text] belongs to the [Formula: see text]-core then, any other admissible element of the form [Formula: see text] should belong to the solution too.

USING THE ASPIRATION CORE TO PREDICT COALITION FORMATION

This work uses the defining principles of the core solution concept to determine not only payoffs but also coalition formation. Given a cooperative transferable utility (TU) game, we propose two noncooperative procedures that in equilibrium deliver a natural and nonempty core extension, the aspiration core, together with the supporting coalitions it implies. As expected, if the cooperative game is balanced, the grand coalition forms. However, if the core is empty, other coalitions arise. Following the aspiration literature, not only partitions but also overlapping coalition configurations are allowed. Our procedures interpret this fact in different ways. The first game allows players to participate with a fraction of their time in more than one coalition, while the second assigns probabilities to the formation of potentially overlapping coalitions. We use the strong Nash and subgame perfect Nash equilibrium concepts.