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Marginal contributions and externalities in the value

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  • Serrano, Roberto
  • Clippel, Geoffroy de

Abstract

For games in partition function form, we explore the implications of distinguishing between the concepts of intrinsic marginal contributions and externalities. If one requires efficiency for the grand coalition, we provide several results concerning extensions of the Shapley value. Using the axioms of efficiency, anonymity, marginality and monotonicity, we provide upper and lower bounds to players' payoffs when affected by external effects, and a characterization of an ''externality-free'' value. If the grand coalition does not form, we characterize a payoff configuration on the basis of the principle of balanced contributions. We also analyze a game of coalition formation that yields sharp predictions

Suggested Citation

  • Serrano, Roberto & Clippel, Geoffroy de, 2005. "Marginal contributions and externalities in the value," UC3M Working papers. Economics we057339, Universidad Carlos III de Madrid. Departamento de Economía.
  • Handle: RePEc:cte:werepe:we057339
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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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