Values for cooperative games with incomplete information: an eloquent example
Myerson's (1984) extension of the lambda-transfer value to cooperative games with incomplete information focus among other things on the strength of the incentive constraints at the solution for determining the power of coalitions. We construct an intuitive three-player game where the player whose only contribution is to partly release the two other players from the incentive constraints they face when they cooperate, receives a zero payoff, according to Myerson's solution. On the contrary, the random order arrival procedure attributes a strictly positive payoff to him. Our example is thus an analog of the banker game of Owen (1972) that was designed for evaluating the lambda-transfer value under complete information. Asymmetric information now takes up the role that was formerly attributed to the lack of transferability of utilities.
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- Myerson, Roger B, 1979.
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- Francoise Forges & Enrico Minelli & Rajiv Vohra, 2000.
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2000-22, Brown University, Department of Economics.
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- FORGES, Françoise & MINELLI, Enrico & VOHRA, Rajiv, 2001. "Incentives and the core of an exchange economy: a survey," CORE Discussion Papers 2001043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Krasa, Stefan & Yannelis, Nicholas C, 1994. "The Value Allocation of an Economy with Differential Information," Econometrica, Econometric Society, vol. 62(4), pages 881-900, July.
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- Roger B. Myerson, 1982. "Two-Person Bargaining Problems with Incomplete Infonnation," Discussion Papers 527, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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