Connectivity and Allocation Rule in a Directed Network
We introduce a new notion of connectivity, what we call weak connectivity, in a directed network where communication is one-way, and show that weak connectivity is equivalent to the usual concept of connectivity if the outdegree of each node is at most one, referred as the [DC] condition. Based on weak connectivity, we define an allocation rule in a directed network by applying the Shapley value type of consideration. We show that the allocation rule is the unique allocation rule satisfying component efficiency and equal bargaining power under the [DC] condition. If the [DC] condition does not hold, it fails to satisfy component efficiency, but can be shown to be the only allocation rule that satisfies equal bargaining power and quasi-component efficiency which is a weaker property.
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Volume (Year): 8 (2008)
Issue (Month): 1 (September)
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- Farrell, Joseph & Gibbons, Robert, 1988.
"Cheap Talk Can Matter in Bargaining,"
Department of Economics, Working Paper Series
qt3qz786xq, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
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- Jeong-Yoo Kim, 1996. "Cheap Talk and Reputation in Repeated Pretrial Negotiation," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 787-802, Winter.
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