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The Average Tree Solution for Cooperative Games with Communication Structure

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Author Info
Herings, P. Jean-Jacques
Laan, Gerard van der
Talman, Dolf
Yang, Zaifu (METEOR)

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Abstract

We study cooperative games with communication structure, represented by an undirectedgraph. Players in the game are able to cooperate only if they can form a network in the graph. A single-valued solution, the average tree solution, is proposed for this class ofgames. Given the graph structure we define a collection of spanning trees, where eachspanning tree specifies a particular way by which players communicate and determines a payoff vector of marginal contributions of all the players. The average tree solution is defined to be the average of all these payoff vectors. It is shown that if a game has acomplete communication structure, then the proposed solution coincides with the Shapleyvalue, and that if the game has a cycle-free communication structure, it is the solutionproposed by Herings, van der Laan and Talman (2008). We introduce the notion of linkconvexity, under which the game is shown to have a non-empty core and the average tree solution lies in the core. In general, link-convexity is weaker than convexity. For games with a cycle-free communication structure, link-convexity is even weaker than super-additivity.

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Paper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 026.

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Date of creation: 2008
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Handle: RePEc:dgr:umamet:2008026

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Keywords: operations research and management science;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Marco Slikker, 2005. "A characterization of the position value," International Journal of Game Theory, Springer, vol. 33(4), pages 505-514, November. [Downloadable!] (restricted)
  2. Demange, Gabrielle, 1994. "Intermediate preferences and stable coalition structures," Journal of Mathematical Economics, Elsevier, vol. 23(1), pages 45-58, January. [Downloadable!] (restricted)
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  3. Talman, A.J.J. & Yamamoto, Y., 2007. "Games With Limited Communication Structure," Discussion Paper 2007-19, Tilburg University, Center for Economic Research. [Downloadable!]
  4. Gabrielle Demange, 2004. "On Group Stability in Hierarchies and Networks," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 754-778, August.
  5. Le Breton, M & Owen, G & Weber, S, 1992. "Strongly Balanced Cooperative Games," International Journal of Game Theory, Springer, vol. 20(4), pages 419-27.
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  6. Herings, P. Jean Jacques & van der Laan, Gerard & Talman, Dolf, 2008. "The average tree solution for cycle-free graph games," Games and Economic Behavior, Elsevier, vol. 62(1), pages 77-92, January. [Downloadable!] (restricted)
  7. Baron, Richard & Béal, Sylvain & Remila, Eric & Solal, Philippe, 2008. "Average tree solutions for graph games," MPRA Paper 10189, University Library of Munich, Germany. [Downloadable!]
  8. René van den Brink & Gerard van der Laan & Vitaly Pruzhansky, 2004. "Harsanyi Power Solutions for Graph-restricted Games," Tinbergen Institute Discussion Papers 04-095/1, Tinbergen Institute. [Downloadable!]
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  1. Baron, Richard & Béal, Sylvain & Remila, Eric & Solal, Philippe, 2008. "Average tree solutions for graph games," MPRA Paper 10189, University Library of Munich, Germany. [Downloadable!]
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