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The socially stable core in structured transferable utility games

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  • Herings, P. Jean-Jacques
  • van der Laan, Gerard
  • Talman, Dolf

Abstract

We consider cooperative games with transferable utility (TU-games), in which we allow for a social structure on the set of players, for instance a hierarchical ordering or a dominance relation.The social structure is utilized to refine the core of the game, being the set of payoffs to the players that cannot be improved upon by any coalition of players.For every coalition the relative strength of a player within that coalition is induced by the social structure and is measured by a power function.We call a payoff vector socially stable if at the collection of coalitions that can attain it, all players have the same power.The socially stable core of the game consists of the core elements that are socially stable.In case the social structure is such that every player in a coalition has the same power, social stability reduces to balancedness and the socially stable core coincides with the core.We show that the socially stable core is non-empty if the game itself is socially stable.In general the socially stable core consists of a finite number of faces of the core and generically consists of a finite number of payoff vectors.Convex TU-games have a non-empty socially stable core, irrespective of the power function.When there is a clear hierarchy of players in terms of power, the socially stable core of a convex TU-game consists of exactly one element, an appropriately defined marginal vector.We demonstrate the usefulness of the concept of the socially stable core by two applications.One application concerns sequencing games and the other one the distribution of water.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 59 (2007)
Issue (Month): 1 (April)
Pages: 85-104

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Handle: RePEc:eee:gamebe:v:59:y:2007:i:1:p:85-104

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Web page: http://www.elsevier.com/locate/inca/622836

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Citations

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Cited by:
  1. Gerard van der Laan & Nigel Moes, 2012. "Transboundary Externalities and Property Rights: An International River Pollution Model," Tinbergen Institute Discussion Papers 12-006/1, Tinbergen Institute.
  2. Erik Ansink & Hans-Peter Weikard, 2009. "Sequential Sharing Rules for River Sharing Problems," Working Papers 2009.114, Fondazione Eni Enrico Mattei.
  3. Rene van den Brink & Gerard van der Laan & Nigel Moes, 2010. "Fair Agreements for Sharing International Rivers with Multiple Springs and Externalities," Tinbergen Institute Discussion Papers 10-096/1, Tinbergen Institute.
  4. Rene van den Brink & Gerard van der Laan & Nigel Moes, 2010. "Fair Agreements for Sharing International Rivers with Multiple Springs and Externalities," Tinbergen Institute Discussion Papers 10-096/1, Tinbergen Institute.
  5. Gerard van der Laan & Nigel Moes, 2012. "Transboundary Externalities and Property Rights: An International River Pollution Model," Tinbergen Institute Discussion Papers 12-006/1, Tinbergen Institute.

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