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Implementing Cooperative Solution Concepts: a Generalized Bidding Approach

  • Yuan Ju


    (Keele University, Centre for Economic Research and School of Economic and Management Studies)

  • David Wettstein


    (Department of Economics, Ben-Gurion University of the Negev)

This paper provides a framework for implementing and comparing several solution concepts for transferable utility cooperative games.We construct bidding mechanisms where players bid for the role of the proposer. The mechanisms differ in the power awarded to the proposer. The Shapley, consensus and equal surplus values are implemented in subgame perfect equilibrium outcomes as power shifts away from the proposer to the rest of the players. Moreover, an alternative informational structure where these solution concepts can be implemented without imposing any conditions of the transferable utility game is discussed as well.

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Paper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2006/06.

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Length: 22 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:kee:kerpuk:2006/06
Contact details of provider: Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom
Phone: +44 (0)1782 584581
Fax: +44 (0)1782 717577
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Order Information: Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
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  1. Maskin, Eric & Moore, John, 1999. "Implementation and Renegotiation," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 39-56, January.
  2. Moldovanu, Benny & Eyal Winter, 1993. "Core Implementation and Increasing Returns to Scale for Cooperation," Discussion Paper Serie B 289, University of Bonn, Germany.
  3. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 661465000000000387, David K. Levine.
  4. Serrano, Roberto, 1995. "Strategic bargaining, surplus sharing problems and the nucleolus," Journal of Mathematical Economics, Elsevier, vol. 24(4), pages 319-329.
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  6. Krishna, V. & serrano, R., 1993. "Perfect Equilibria of a Model of N-Person Noncooperative Bargaining," Papers 10-93-31, Pennsylvania State - Department of Economics.
  7. (*), Y. Stephen Chiu & Ani Dasgupta, 1998. "On implementation via demand commitment games," International Journal of Game Theory, Springer, vol. 27(2), pages 161-189.
  8. Dagan, N. & Serrano, R. & Volij, O.C., 1994. "A Non-Cooperative View of Consistent Bankruptcy Rules," Discussion Paper 1994-11, Tilburg University, Center for Economic Research.
  9. Inés Macho-Stadler & David Pérez-Castrillo & David Wettstein, 2005. "Efficient Bidding with Externalities," UFAE and IAE Working Papers 641.05, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  10. Moore, John & Repullo, Rafael, 1988. "Subgame Perfect Implementation," Econometrica, Econometric Society, vol. 56(5), pages 1191-1220, September.
  11. Young, H.P., 1994. "Cost allocation," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 34, pages 1193-1235 Elsevier.
  12. Kim Hang Pham Do & Henk Norde, 2007. "The Shapley Value For Partition Function Form Games," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 353-360.
  13. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
  14. Ju, Y., 2004. "The Consensus Value for Games in Partition Function Form," Discussion Paper 2004-60, Tilburg University, Center for Economic Research.
  15. David P�rez-Castrillo & David Wettstein, 2002. "Choosing Wisely: A Multibidding Approach," American Economic Review, American Economic Association, vol. 92(5), pages 1577-1587, December.
  16. Ju, Y. & Borm, P.E.M., 2005. "Externalities and Compensation : Primeval Games and Solutions," Discussion Paper 2005-71, Tilburg University, Center for Economic Research.
  17. Winter, Eyal, 1994. "The Demand Commitment Bargaining and Snowballing Cooperation," Economic Theory, Springer, vol. 4(2), pages 255-73, March.
  18. Juan Vidal-Puga, 2005. "A bargaining approach to the Owen value and the Nash solution with coalition structure," Economic Theory, Springer, vol. 25(3), pages 679-701, 04.
  19. Vidal-Puga, Juan & Bergantinos, Gustavo, 2003. "An implementation of the Owen value," Games and Economic Behavior, Elsevier, vol. 44(2), pages 412-427, August.
  20. Volij, Oscar & Dagan, Nir & Serrano, Roberto, 1997. "A Non-Cooperative View of Consistent Bankruptcy Rules," Staff General Research Papers 5130, Iowa State University, Department of Economics.
  21. Faruk Gul, 1999. "Efficiency and Immediate Agreement: A Reply to Hart and Levy," Econometrica, Econometric Society, vol. 67(4), pages 913-918, July.
  22. David Pérez-Castrillo & David Wettstein, . "Bidding For The Surplus: A Non-Cooperative Approach To The Shapley Value," UFAE and IAE Working Papers 461.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  23. Sandeep Baliga & Sandro Brusco, 2000. "Collusion, renegotiation and implementation," Social Choice and Welfare, Springer, vol. 17(1), pages 69-83.
  24. Hart, Sergiu & Mas-Colell, Andreu, 1996. "Bargaining and Value," Econometrica, Econometric Society, vol. 64(2), pages 357-80, March.
  25. Juan Vidal-Puga, 2003. "Bargaining with commitments," Game Theory and Information 0306002, EconWPA.
  26. Yuan Ju & Peter Borm & Pieter Ruys, 2007. "The consensus value: a new solution concept for cooperative games," Social Choice and Welfare, Springer, vol. 28(4), pages 685-703, June.
  27. 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.
  28. François Maniquet, 2003. "Implementation of allocation rules under perfect information," Social Choice and Welfare, Springer, vol. 21(2), pages 323-346, October.
  29. Thomson, William, 2003. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey," Mathematical Social Sciences, Elsevier, vol. 45(3), pages 249-297, July.
  30. Ignacio García-Jurado & Julio González-Díaz & Antonio Villar, 2006. "A Non-cooperative Approach to Bankruptcy Problems," Spanish Economic Review, Springer, vol. 8(3), pages 189-197, September.
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