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A friendly computable characteristic function

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  • Reddy, Puduru V.
  • Zaccour, Georges

Abstract

We consider an n-player game in coalitional form. We use the so-called δ characteristic function to determine the strength of all possible coalitions. The value of a coalition is obtained under the behavioral assumption that left-out players do not react strategically to the formation of that coalition, but stick to their Nash equilibrium actions in the n-player noncooperative game. This assumption has huge computational merit, especially in games where each player is described by a large-scale mathematical program. For the class of games with multilateral externalities discussed in Chander and Tulkens, we show that the δ characteristic function is superadditive and has a nonempty core, and that the δ-core is a subset of the γ-core.

Suggested Citation

  • Reddy, Puduru V. & Zaccour, Georges, 2016. "A friendly computable characteristic function," Mathematical Social Sciences, Elsevier, vol. 82(C), pages 18-25.
    • Handle: RePEc:eee:matsoc:v:82:y:2016:i:c:p:18-25
    DOI: 10.1016/j.mathsocsci.2016.03.008
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    References listed on IDEAS

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    1. Parkash Chander, 2007. "The gamma-core and coalition formation," International Journal of Game Theory, Springer;Game Theory Society, vol. 35(4), pages 539-556, April.
    2. Parkash Chander & Henry Tulkens, 2006. "The Core of an Economy with Multilateral Environmental Externalities," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 153-175, Springer.
    3. Kaneko, Mamoru, 1977. "The Ratio Equilibria and the Core of the Voting Game G(N, W) in a Public Goods Economy," Econometrica, Econometric Society, vol. 45(7), pages 1589-1594, October.
    4. Marc Germain & Philippe Toint & Henry Tulkens & Aart Zeeuw, 2006. "Transfers to Sustain Dynamic Core-Theoretic Cooperation in International Stock Pollutant Control," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 251-274, Springer.
    5. Petrosjan, Leon & Zaccour, Georges, 2003. "Time-consistent Shapley value allocation of pollution cost reduction," Journal of Economic Dynamics and Control, Elsevier, vol. 27(3), pages 381-398, January.
    6. G. Zaccour, 2003. "Computation of Characteristic Function Values for Linear-State Differential Games," Journal of Optimization Theory and Applications, Springer, vol. 117(1), pages 183-194, April.
    7. Richard Loulou & Maryse Labriet, 2008. "ETSAP-TIAM: the TIMES integrated assessment model Part I: Model structure," Computational Management Science, Springer, vol. 5(1), pages 7-40, February.
    8. Carsten Helm, 2001. "On the existence of a cooperative solution for a coalitional game with externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(1), pages 141-146.
    9. Richard Loulou, 2008. "ETSAP-TIAM: the TIMES integrated assessment model. part II: mathematical formulation," Computational Management Science, Springer, vol. 5(1), pages 41-66, February.
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    Cited by:

    1. Elena Parilina & Stepan Akimochkin, 2021. "Cooperative Stochastic Games with Mean-Variance Preferences," Mathematics, MDPI, vol. 9(3), pages 1-15, January.
    2. Elena Parilina & Leon Petrosyan, 2020. "On a Simplified Method of Defining Characteristic Function in Stochastic Games," Mathematics, MDPI, vol. 8(7), pages 1-14, July.
    3. Parilina, Elena M. & Zaccour, Georges, 2022. "Payment schemes for sustaining cooperation in dynamic games," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).
    4. Elena M. Parilina & Georges Zaccour, 2017. "Node-Consistent Shapley Value for Games Played over Event Trees with Random Terminal Time," Journal of Optimization Theory and Applications, Springer, vol. 175(1), pages 236-254, October.
    5. Takeda, Kohei & Hosoe, Toyoki & Watanabe, Takayuki & Matsubayashi, Nobuo, 2018. "Stability analysis of horizontal mergers in a market with asymmetric substitutability," Mathematical Social Sciences, Elsevier, vol. 96(C), pages 73-84.
    6. Ekaterina Gromova & Anastasiya Malakhova & Arsen Palestini, 2018. "Payoff Distribution in a Multi-Company Extraction Game with Uncertain Duration," Mathematics, MDPI, vol. 6(9), pages 1-17, September.

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