Implementing Cooperative Solution Concepts:  A Generalized Bidding Approach

Yuan Ju; David Wettstein

doi:10.1007/s00199-008-0335-y

Implementing Cooperative Solution Concepts: A Generalized Bidding Approach

Yuan Ju, David Wettstein

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Pages (from-to)	307-330
Number of pages	24
Journal	Economic Theory
Volume	39
Issue number	2
DOIs	https://doi.org/10.1007/s00199-008-0335-y
Publication status	Published - May 2009

Bibliographical note

M1 - 2

Keywords

Implementation
Bidding mechanism
Shapley value
Consensus value
Equal surplus value
NONCOOPERATIVE APPROACH
SHAPLEY VALUE
OWEN VALUE
BANKRUPTCY
GAMES
EXTERNALITIES
RENEGOTIATION
ALLOCATION
NUCLEOLUS
SURPLUS

Access to Document

10.1007/s00199-008-0335-y

http://link.springer.com/article/10.1007%2Fs00199-008-0335-y

Cite this

@article{55eaea3ff8a34ef09d8d4afda4579606,

title = "Implementing Cooperative Solution Concepts: A Generalized Bidding Approach",

abstract = "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.",

keywords = "Implementation, Bidding mechanism, Shapley value, Consensus value, Equal surplus value, NONCOOPERATIVE APPROACH, SHAPLEY VALUE, OWEN VALUE, BANKRUPTCY, GAMES, EXTERNALITIES, RENEGOTIATION, ALLOCATION, NUCLEOLUS, SURPLUS",

author = "Yuan Ju and David Wettstein",

note = "M1 - 2",

year = "2009",

month = may,

doi = "10.1007/s00199-008-0335-y",

language = "English",

volume = "39",

pages = "307--330",

journal = "Economic Theory",

issn = "1432-0479",

publisher = "Springer",

number = "2",

}

TY - JOUR

T1 - Implementing Cooperative Solution Concepts

T2 - A Generalized Bidding Approach

AU - Ju, Yuan

AU - Wettstein, David

N1 - M1 - 2

PY - 2009/5

Y1 - 2009/5

N2 - 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.

AB - 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.

KW - Implementation

KW - Bidding mechanism

KW - Shapley value

KW - Consensus value

KW - Equal surplus value

KW - NONCOOPERATIVE APPROACH

KW - SHAPLEY VALUE

KW - OWEN VALUE

KW - BANKRUPTCY

KW - GAMES

KW - EXTERNALITIES

KW - RENEGOTIATION

KW - ALLOCATION

KW - NUCLEOLUS

KW - SURPLUS

UR - http://www.scopus.com/inward/record.url?scp=60349103777&partnerID=8YFLogxK

U2 - 10.1007/s00199-008-0335-y

DO - 10.1007/s00199-008-0335-y

M3 - Article

SN - 1432-0479

VL - 39

SP - 307

EP - 330

JO - Economic Theory

JF - Economic Theory

IS - 2