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Bidding for the Surplus : A Non-cooperative Approach to the Shapley Value

Authors
Journal
Journal of Economic Theory
0022-0531
Publisher
Elsevier
Publication Date
Volume
100
Issue
2
Identifiers
DOI: 10.1006/jeth.2000.2704
Keywords
  • Shapley Value
  • Implementation
  • Simple Mechanism
  • Coalition Formation

Abstract

Abstract We propose a simple mechanism to determine how the surplus generated by cooperation is to be shared in zero-monotonic environments with transferable utility. The mechanism consists of a bidding stage followed by a proposal stage. We show that the subgame perfect equilibrium outcomes of this mechanism coincide with the vector of the Shapley value payoffs. We extend our results to implement the weighted Shapley values. Finally, we generalize our mechanism to handle arbitrary transferable utility environments. The modified mechanism generates an efficient coalition structure, and implements the Shapley values of the super-additive cover of the environment. Journal of Economic Literature Classification Numbers: C71, C72.

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