IDEAS home Printed from https://ideas.repec.org/p/kyo/wpaper/1006.html
   My bibliography  Save this paper

Analysis of the core under inequality-averse utility functions

Author

Listed:
  • Seiji Takanashi

    (Graduate School of Information Science and Electrical Engineering, Kyushu University)

Abstract

In this paper, we study cooperative games with the players whose pref- erences depend on all players’ allocations, which we refer to as the social preferences. The social preferences we study in this paper are represented by the utility functions proposed by Fehr and Schmidt (1999) or the util- ity functions proposed by Charness and Rabin (2002). First, we define and characterize the cores, which are the same as the standard core except that the utility functions are the Fehr-Schmidt or the Charness-Rabin type. We show that the Fehr-Schmidt type core becomes smaller if the players become more envious and that it may become larger or smaller if the players become more compassionate. We also show that the Charness-Rabin type core be- comes smaller if the players pay more attention to care about the minimal allocation and that it may become larger or smaller if the players pay more attention to care about the social welfare. Moreover, we analyze the alpha- core and the beta-core of the cooperative games consisting of players with these types of social preferences, as well as a new core concept that takes ac- count of networks among the players. We show that the Fehr-Schmidt type core is the smallest among these cores and that the alpha-core coincides with the beta-core under the Fehr-Schmidt utility functions.

Suggested Citation

  • Seiji Takanashi, 2018. "Analysis of the core under inequality-averse utility functions," KIER Working Papers 1006, Kyoto University, Institute of Economic Research.
  • Handle: RePEc:kyo:wpaper:1006
    as

    Download full text from publisher

    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP1006.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    2. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    3. Dutta, Bhaskar & Ray, Debraj, 1989. "A Concept of Egalitarianism under Participation Constraints," Econometrica, Econometric Society, vol. 57(3), pages 615-635, May.
    4. Javier Arin & Jeroen Kuipers & Dries Vermeulen, 2008. "An axiomatic approach to egalitarianism in TU-games," International Journal of Game Theory, Springer;Game Theory Society, vol. 37(4), pages 565-580, December.
    5. Anindya Bhattacharya, 2004. "On the equal division core," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 22(2), pages 391-399, April.
    6. Javier Arin & Elena Inarra, 2001. "Egalitarian solutions in the core," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(2), pages 187-193.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Social preference; Inequality-aversion; Cooperative game; Core; Network;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kyo:wpaper:1006. 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: (Ryo Okui) The email address of this maintainer does not seem to be valid anymore. Please ask Ryo Okui to update the entry or send us the correct email address. General contact details of provider: http://edirc.repec.org/data/iekyojp.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.