A New Outside Option Value for Networks: The Kappa-Value – Measuring Distribution of Power of Political Agreements
AbstractIn an economic or social situation where agents have to group in order to achieve common goals, how can we calculate the coalitional rents of the agents arising from the coalition formation? Once we have formalized the situation via a TU-game and a network describing the economic structure, we can apply different allocation rules to assign the coalitional rents to the agents. We specifically analyze situations where parties with a specific vote distribution in a parliament have to build agreements in order to reach some required quorum. In this situation, we want to measure the (relative) distribution of power. We analyze the allocation rules called Position value (Meessen (1988) and Borm et al. (1992)) and graph-chi-value (Casajus (2009)). Applying the generalized framework (Gómez et al. (2008)), a framework where coalitions are not established yet, we fi nd that the graph-chi-value does not differ for networks referring to the same coalition while the Position value takes into account the specific role of an agent within the network, i.e. the communication path. We define and characterize a new outside option sensitive value, the Kappa-value, which takes into account both outside options and the role of an agent within the network.
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Bibliographic InfoPaper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0326.
Length: 15 pages
Date of creation: Apr 2012
Date of revision:
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- H10 - Public Economics - - Structure and Scope of Government - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-17 (All new papers)
- NEP-CDM-2012-04-17 (Collective Decision-Making)
- NEP-GTH-2012-04-17 (Game Theory)
- NEP-NET-2012-04-17 (Network Economics)
- NEP-POL-2012-04-17 (Positive Political Economics)
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- Gómez, D. & González-Arangüena, E. & Manuel, C. & Owen, G., 2008. "A value for generalized probabilistic communication situations," European Journal of Operational Research, Elsevier, vol. 190(2), pages 539-556, October.
- André Casajus, 2009. "Networks and outside options," Social Choice and Welfare, Springer, vol. 32(1), pages 1-13, January.
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