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An Almost Ideal Sharing Scheme for Coalition Games with Externalities

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Author Info
Johan Eyckmans () (EHSAL - Europese hogeschool Brussel; K.U.Leuven-Center for Economic Studies)
Michael Finus () (Department of Economics, University of Hagen,)

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Abstract

We propose a class of sharing schemes for the distribution of the gains from cooperation for coalition games with externalities. In the context of the partition function, it is shown that any member of this class of sharing schemes leads to the same set of stable coalitions in the sense of d’Aspremont et al. (1983). These schemes are “almost ideal” in that they stabilize these coalitions which generate the highest global welfare among the set of “potentially stable coalitions”. Our sharing scheme is particularly powerful for economic problems that are characterized by positive externalities from coalition formation and which therefore are likely to suffer from severe free-riding.

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Publisher Info
Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment in its series Energy, Transport and Environment Working Papers Series with number ete0414.

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Length: 16 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:ete:etewps:ete0414

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Web page: http://www.econ.kuleuven.be/ew/academic/energmil
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Related research
Keywords: coalition games; partition function; externalities; sharing schemes;

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Find related papers by JEL classification:
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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References listed on IDEAS
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. Johan Eyckmans & Michael Finus, 2003. "Coalition Formation in a Global Warming Game: How the Design of Protocols Affects the Success of Environmental Treaty-Making," Energy, Transport and Environment Working Papers Series ete0317, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
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  2. Ray, D. & Vohra, R., 1996. "A Theory of Endogenous Coalition Structure," Papers 68, Boston University - Industry Studies Programme.
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  3. Arce M., Daniel G. & Sandler, Todd, 2003. "Health-promoting alliances," European Journal of Political Economy, Elsevier, vol. 19(2), pages 355-375, June. [Downloadable!] (restricted)
  4. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June. [Downloadable!] (restricted)
  5. Chander, Parkash & Tulkens, Henry, 1994. "The Core of an Economy With Multilateral Environmental Externalities," Working Papers 886, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
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  6. Thomson, William, 1994. "Cooperative models of bargaining," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 35, pages 1237-1284 Elsevier. [Downloadable!] (restricted)
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  7. Marion Kohler, . "Coalition formation in international monetary policy games," Bank of England working papers 92, Bank of England. [Downloadable!]
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  8. Francesco Bosello & Barbara Buchner & Carlo Carraro, 2003. "Equity, Development, and Climate Change Control," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 601-611, 04/05. [Downloadable!] (restricted)
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Cited by:
(explanations, 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. Carlo Carraro & Johan Eyckmans & Michael Finus, 2005. "Optimal Transfers and Participation Decisions in International Environmental Agreements," Working Papers 2005.50, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  2. Thierry Bréchet & François Gerard, 2007. "Climate Coalitions: A Theoretical and Computational Appraisal," Working Papers 2007.21, Fondazione Eni Enrico Mattei. [Downloadable!]
  3. Hans-Peter Weikard & Rob Dellink, 2008. "Sticks and Carrots for the Design of International Climate Agreements with Renegotiations," Working Papers 2008.26, Fondazione Eni Enrico Mattei. [Downloadable!]
  4. Valentina Bosetti & Carlo Carraro & Enrica De Cian & Romain Duval & Emanuele Massetti & Massimo Tavoni, 2009. "The Incentives to Participate in, and the Stability of, International Climate Coalitions: A Game-theoretic Analysis Using the Witch Model," Working Papers 2009.64, Fondazione Eni Enrico Mattei. [Downloadable!]
  5. Thierry, BRECHET & Franois, GERARD & Henry, TULKENS, 2007. "Climate coalitions : a theoretical and computational appraisal," Discussion Papers (ECON - Département des Sciences Economiques) 2007006, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
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  6. Michael Finus & Pedro Pintassilgo & Marko Lindroos & Gordon Munro, 2008. "Stability and Success of Regional Fisheries Management Organizations," Working Papers 2008.20, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  7. Porchiung Chou & Cheickna Sylla, 2008. "The formation of an international environmental agreement as a two-stage exclusive cartel formation game with transferable utilities," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 8(4), pages 317-341, December. [Downloadable!] (restricted)
  8. Urs Steiner Brandt & Lone Grønbæk Kronbak, 2006. "Robustness of Sharing Rules under Climate Change - The Case of International Fisheries Agreements," Working Papers 73/06, University of Southern Denmark, Department of Environmental and Business Economics. [Downloadable!]
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