IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

A New Class of Welfare Maximizing Stable Sharing Rules for Partition Function Games with Externalities

  • Eyckmans, Johan

    ()

    (Hogeschool-Universiteit Brussel (HUB), Belgium)

  • Finus, Michael

    (University of Exeter Business School,UK)

  • Mallozzi, Lina

    (University of Naples Federico II, Italy)

We propose a class of sharing rules for the distribution of the gains from cooperation for partition function games with externalities. We show that this class of sharing rules is characterized by three axioms: coalitional efficiency, additivity and anonimity which are adapted to the context of partition function games. The sharing rules stabilize, in the sense of d'Aspremont et al. (1983), the coalition which generates the highest global welfare among the set of potentially internally stable coalitions. The new class of sharing rules is particularly powerful for economic problems that are characterized by positive externalities from coalition formation (outsiders benefit from the expansion of the coalition) and which therefore often suffer from free-riding.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://lirias.hubrussel.be/bitstream/123456789/4806/1/11HRP08.pdf
Download Restriction: no

Paper provided by Hogeschool-Universiteit Brussel, Faculteit Economie en Management in its series Working Papers with number 2011/08.

as
in new window

Length: 27 page
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:hub:wpecon:201108
Contact details of provider: Web page: http://research.hubrussel.be

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Kolpin, Van, 1996. "Multi-Product Serial Cost Sharing: An Incompatibility with the Additivity Axiom," Journal of Economic Theory, Elsevier, vol. 69(1), pages 227-233, April.
  2. Yi, Sang-Seung, 1997. "Stable Coalition Structures with Externalities," Games and Economic Behavior, Elsevier, vol. 20(2), pages 201-237, August.
  3. Ray, D. & Vohra, R., 1996. "A Theory of Endogenous Coalition Structure," Papers 68, Boston University - Industry Studies Programme.
  4. Michel Grabisch & Yukihiko Funaki, 2011. "A coalition formation value for games with externalities," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00344797, HAL.
  5. Sang-Seung, Yi, 1996. "Endogenous formation of customs unions under imperfect competition: open regionalism is good," Journal of International Economics, Elsevier, vol. 41(1-2), pages 153-177, August.
  6. 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.
  7. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
  8. Matthew McGinty, 2007. "International environmental agreements among asymmetric nations," Oxford Economic Papers, Oxford University Press, vol. 59(1), pages 45-62, January.
  9. Sandler,Todd, 2004. "Global Collective Action," Cambridge Books, Cambridge University Press, number 9780521834773, Junio.
  10. Hans-Peter Weikard, 2009. "Cartel Stability Under An Optimal Sharing Rule," Manchester School, University of Manchester, vol. 77(5), pages 575-593, 09.
  11. Hans-Peter Weikard & Michael Finus & Juan-Carlos Altamirano-Cabrera, 2006. "The impact of surplus sharing on the stability of international climate agreements," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 209-232, April.
  12. Marion Kohler, 1999. "Coalition formation in international monetary policy games," Bank of England working papers 92, Bank of England.
  13. Yi, Sang-Seung & Shin, Hyukseung, 2000. "Endogenous formation of research coalitions with spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 229-256, February.
  14. Fuentes Albero Cristina & Rubio Jorge Santiago J., 2008. "Can International Environmental Cooperation Be Bought?," Working Papers 2010101, Fundacion BBVA / BBVA Foundation.
  15. Poyago-Theotoky, Joanna, 1995. "Equilibrium and Optimal Size of a Research Joint Venture in an Oligopoly with Spillovers," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 209-26, June.
  16. Macho-Stadler, Ines & Perez-Castrillo, David & Wettstein, David, 2007. "Sharing the surplus: An extension of the Shapley value for environments with externalities," Journal of Economic Theory, Elsevier, vol. 135(1), pages 339-356, July.
  17. Maarten F. Cornet, 2003. "Partition function bargaining with public demands," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(4), pages 845-862, November.
  18. Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 98(2), pages 185-199.
  19. Bolger, E M, 1989. "A Set of Axioms for a Value for Partition Function Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 18(1), pages 37-44.
  20. René Brink & Yukihiko Funaki, 2009. "Axiomatizations of a Class of Equal Surplus Sharing Solutions for TU-Games," Theory and Decision, Springer, vol. 67(3), pages 303-340, September.
  21. Debraj Ray & Rajiv Vohra, 2001. "Coalitional Power and Public Goods," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1355-1384, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hub:wpecon:201108. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Janssens)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.