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On 1-convexity and nucleolus of co-insurance games

Author

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  • Driessen, Theo S.H.
  • Fragnelli, Vito
  • Katsev, Ilya V.
  • Khmelnitskaya, Anna B.

Abstract

The insurance situation in which an enormous risk is insured by a number of insurance companies is modeled through a cooperative TU game, the so-called co-insurance game, first introduced in Fragnelli and Marina (2004). In this paper we present certain conditions on the parameters of the model that guarantee the 1-convexity property of co-insurance games which in turn ensures the nonemptiness of the core and the linearity of the nucleolus as a function of the variable premium. Further we reveal conditions when a co-insurance game is representable in the form of a veto-removed game and present an efficient final algorithm for computing the nucleolus of a veto-removed game.

Suggested Citation

  • Driessen, Theo S.H. & Fragnelli, Vito & Katsev, Ilya V. & Khmelnitskaya, Anna B., 2011. "On 1-convexity and nucleolus of co-insurance games," Insurance: Mathematics and Economics, Elsevier, vol. 48(2), pages 217-225, March.
    • Handle: RePEc:eee:insuma:v:48:y:2011:i:2:p:217-225
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    References listed on IDEAS

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    1. Vincent Feltkamp & Javier Arin, 1997. "The Nucleolus and Kernel of Veto-Rich Transferable Utility Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 26(1), pages 61-73.
    2. Deprez, Olivier & Gerber, Hans U., 1985. "On convex principles of premium calculation," Insurance: Mathematics and Economics, Elsevier, vol. 4(3), pages 179-189, July.
    3. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
    4. Marieke Quant & Peter Borm & Hans Reijnierse & Bas van Velzen, 2005. "The core cover in relation to the nucleolus and the Weber set," International Journal of Game Theory, Springer;Game Theory Society, vol. 33(4), pages 491-503, November.
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    Cited by:

    1. Theo Driessen & Dongshuang Hou, 2010. "A note on the nucleolus for 2-convex TU games," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(1), pages 185-189, March.

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