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Values For Environments With Externalities – The Average Approach

Author

Listed:
  • David Wettstein

    () (BGU)

  • Ines Macho-Stadler

    () (Universitat Autonoma de Barcelona and Barcelona GSE)

  • David Perez-Castrillo

    () (Universitat Autonoma de Barcelona and Barcelona GSE)

Abstract

We propose the “average approach,” where the worth of a coalition is a weighted average of its worth for different partitions of the players’ set, as a unifying method to extend values for characteristic function form games. Our method allows us to extend the equal division value, the equal surplus value, the consensus value, the ë-egalitarian Shapley value, and the least-square family. For each of the first three extensions, we also provide an axiomatic characterization of a particular value for partition function form games. And for each of the last two extensions, we find a family of values that satisfy the properties.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • David Wettstein & Ines Macho-Stadler & David Perez-Castrillo, 2016. "Values For Environments With Externalities – The Average Approach," Working Papers 1606, Ben-Gurion University of the Negev, Department of Economics.
  • Handle: RePEc:bgu:wpaper:1606
    as

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    File URL: http://in.bgu.ac.il/en/humsos/Econ/Workingpapers/1606.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Externalities; Sharing the surplus; Average Approach;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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