Efficiency in coalition games with externalities

A natural extension of superadditivity is not sufficient to imply that the grand coalition is efficient when externalities are present. We provide a condition, analogous to convexity, that is sufficient for the grand coalition to be efficient and show that this also implies that the (appropriately d...

Full description

Saved in:
Bibliographic Details
Published inGames and economic behavior Vol. 61; no. 2; pp. 242 - 258
Main Author Hafalir, Isa E.
Format Journal Article
LanguageEnglish
Published Duluth Elsevier Inc 01.11.2007
Elsevier
Academic Press
SeriesGames and Economic Behavior
Subjects
Coalition formation
Coalitions
Decision making
Efficiency
Externalities
Game theory
Group dynamics
Group interaction
Implementation
Partition function games
Pay-off
Shapley value
Social networks
Social norms
Studies
Externalities
D62
Shapley value
Coalition formation
Partition function games
C71
Implementation
C72
Online AccessGet full text

Cover

More Information
Summary:A natural extension of superadditivity is not sufficient to imply that the grand coalition is efficient when externalities are present. We provide a condition, analogous to convexity, that is sufficient for the grand coalition to be efficient and show that this also implies that the (appropriately defined) core is nonempty. Moreover, we propose a mechanism which implements the most efficient partition for all coalition formation games and characterizes the resulting payoff division.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0899-8256
1090-2473
DOI:10.1016/j.geb.2007.01.009