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On convexity in cooperative games with externalities

Author

Listed:
  • J. M. Alonso-Meijide

    (Universidade de Santiago de Compostela)

  • M. Álvarez-Mozos

    (Universitat de Barcelona)

  • M. G. Fiestras-Janeiro

    (Universidade de Vigo)

  • A. Jiménez-Losada

    (Universidad de Sevilla)

Abstract

We introduce new notions of superadditivity and convexity for games with coalitional externalities. We show parallel results to the classic ones for transferable utility games without externalities. In superadditive games the grand coalition is the most efficient organization of agents. The convexity of a game is equivalent to having non decreasing contributions to larger embedded coalitions. We also see that convex games can only have negative externalities.

Suggested Citation

  • J. M. Alonso-Meijide & M. Álvarez-Mozos & M. G. Fiestras-Janeiro & A. Jiménez-Losada, 2022. "On convexity in cooperative games with externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(1), pages 265-292, July.
    • Handle: RePEc:spr:joecth:v:74:y:2022:i:1:d:10.1007_s00199-021-01371-8
    DOI: 10.1007/s00199-021-01371-8
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    References listed on IDEAS

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    More about this item

    Keywords

    Externalities; Superadditivity; Convexity; Contribution; Partition function; Lattice;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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