sequential formation of coalitions in games with externalities and fixed payoff division this paper analyzes a sequential game of coalition formation when the division of the coalitional surplus is fixed and the payoffs are defined relative to the whole coalition structure gains from cooperation are represented by a valuation which maps coalition structures into payoff vectors i show that any core stable coalition structure can be attained as a stationary perfect equilibrium of the game if stationary perfect equilibria may fail to exist in general games a simple condition is provided under which they exist in symmetric games furthermore symmetric stationary perfect equilibria of symmetric games generate a coalition structure which is generically unique up to a permutation of the players a general method for the characterization of equilibria in symmetric games is proposed and applied to the formation of cartels in oligopolies and coalitions in symmetric majority games journal of economic literatureclassification numbers c78 c71 1996 academic press inc

cost allocation in rescheduling with machine unavailable period abstract we study a rescheduling problem faced by multiple job owners sharing a single machine where jobs need to be rescheduled when the machine becomes unavailable for a period of time the disruption caused by any new schedule is restricted such that the difference between the completion times in the initial and the new schedules of any job is no more than a given threshold a natural way to reschedule is to process the jobs in the initial sequence each as early as possible this defines a feasible schedule over which cost saving can potentially be achieved by optimal rescheduling as long as the cost saving can be fairly shared by job owners we define a cooperative game for job owners accordingly to share the cost saving given that the optimization problem is computationally intractable we find several optimal properties and develop an optimal pseudopolynomial time dynamic programming algorithm for rescheduling we provide a simple closed form core allocation of the total cost saving for all the jobs and also provide the shapley value of the game in a computable form then we computationally evaluate the extra cost caused by machine unavailability the cost saving from optimization relative to the naturally constructed schedule the likelihood for the shapley value to be a core allocation and how the shapley value allocates cost saving among job owners managerial insights are derived from the computational studies this work contributes to the literature by explicitly incorporating two classic scheduling topics sequencing game and rescheduling

multi issue allocation situations abstract this paper introduces a new class of transferable utility games called multi issue allocation games these games arise from various allocation situations and are based on the concepts underlying the bankruptcy model as introduced by o neill math social sci 2 1982 345 in this model a perfectly divisible good estate has to be divided amongst a given set of agents each of whom has some claim on the estate contrary to the standard bankruptcy model the current model deals with situations in which the agents claims are multi dimensional where the dimensions correspond to various issues it is shown that the class of multi issue allocation games coincides with the class of non negative exact games the run to the bank rule is introduced as a solution for multi issue allocation situations and turns out to be shapley value of the corresponding game finally this run to the bank rule is characterised by means of a consistency property in the spirit of o neill

optimization of india s power sector strategies using weight restricted stochastic data envelopment analysis abstract india s power sector has a significant impact on the country s development and climate change mitigation efforts optimization of energy planning is therefore key to achieving the overall planning goals the hierarchical multi objective policy optimization is a policy centric multi level bottom up iterative approach designed from a developing country perspective utilizing the optimality principle of dynamic programming it is applied to the indian power sector by grouping the strategies into three portfolios namely power generation mix demand side efficiency group and supply side efficiency group each portfolio is optimized taking into account the objectives of cost minimization and comprehensive risk and barrier reduction the portfolios are further combined and optimized at a higher level with respect to higher level objectives namely economic growth energy equity energy security and climate sustainability this paper focuses on the second level optimization utilizing data envelopment analysis dea both the deterministic and stochastic variations have been analysed and the results compared in respect of unrestricted as well as restricted weight models the analysis shows that weight restricted stochastic dea model is most appropriate for efficiency optimization of power sector strategies the methodology can be effectively used for energy planning in developing countries

collaborative replenishment in the presence of intermediaries in complex supply chains downstream buyers would often replenish individually from intermediaries instead of directly dealing with original manufacturers although collaborative replenishment from intermediaries might generate benefits significant cost reductions could be achieved when direct replenishments from manufacturers are considered this paper constructs a general model to study collaborative replenishment in multi product chains with alternative sources of supply i e manufacturers and intermediaries a collaborative organization determines the optimal choices of replenishment sources on behalf of its members to minimize collective costs we introduce a class of cooperative games associated with these situations and give sufficient conditions for their concavity we investigate the choice of allocation rule and its effect on supply chain efficiency when buyers strategically participate in the collaborative organization we prove that the shapley value coordinates the supply chain i e it makes complete participation the best strategy for buyers even under asymmetric information this setting is compared with an alternative structure where buyers can only collaborate in source specific replenishment organizations that purchase all requested products either from intermediaries or manufacturers although there are always participation strategies that result in minimum collective cost it is impossible to find allocation rules for source specific replenishment organizations that always motivate the buyers to choose such strategies

non manipulable division rules in claim problems and generalizations abstract when resources are divided among agents the characteristics of the agents are taken into consideration a simple example is the bankruptcy problem where the liquidation value of a bankrupt firm is divided among the creditors based on their claims we characterize division rules under which no group of agents can increase the total amount they receive by transferring their characteristics within the group by allowing agents characteristics to be multi dimensional and choosing the meaning of variables appropriately our model can subsume a number of existing and new allocation problems such as cost sharing social choice with transferable utilities income redistribution bankruptcy with multiple types of assets probability updating and probability aggregation a number of existing and new results in specific problems are obtained as corollaries

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

a theory of endogenous coalition structures consider an environment with widespread externalities and suppose that bind ing agreements can be written we study coalition formation in such a setting our analysis proceeds by defining on a partition function an extensive form bargaining game we establish the existence of a stationary subgame perfect equilibrium for such a game our main results are concerned with the characterization of equilib rium coalition structures we develop an algorithm that generates under certain conditions an equilibrium coalition structure our characterization results are especially sharp for symmetric partition functions in particular we provide a uniqueness theorem and apply our results to a cournot oligopoly journal of economic literature classification numbers c71 c72 c78 d62 q 1999 academic press

marginal contributions and externalities in the value our concern is the extension of the theory of the shapley value to problems involving externalities using the standard axiom systems behind the shapley value for an arbitrary exogenous coalition structure leads to the identification of bounds on players payos around an externality free value in endogenizing the coalition structure we analyze a two stage process of coalition formation in whose second stage our axiomatic results are applied we find reasons to explain inecient coalition structures and provide sucient conditions for eciency

bargaining and value we present and analyze a model of noncooperative bargaining among n participants applied to situations describable as games in coalitional form this leads to a unified solution theory for such games that has as special cases the shapley value in the transferable utility tu case the nash bargaining solution in the pure bargaining case and the recently introduced maschler owen consistent value in the general nontransferable utility ntu case moreover we show that any variation in a certain class of our bargaining procedure which generates the shapley value in the tu setup must yield the consistent value in the general ntu setup

characterizations of pareto efficient fair and strategy proof allocation rules in queueing problems a set of agents with possibly different waiting costs have to receive the same service one after the other efficiency requires to maximize total welfare fairness requires to treat equal agents equally one must form a queue set up monetary transfers to compensate agents having to wait and not a priori arbitrarily exclude agents from positions as one may not know agents waiting costs they may have no incentive to reveal them we identify the only rule satisfying pareto efficiency equal treatment of equals in welfare or symmetry and strategy proofness it satisfies stronger axioms as no envy and anonymity further its desirability extends to related problems to obtain these results we prove that a rule single valued or not satisfies queue efficiency and strategy proofness if and only if it always selects efficient queues and sets transfers a la groves groves t 1973 incentives in teams econometrica 41 617 631 this holds in other problems provided the domain of quasilinear preferences is rich enough

the diverging patterns of profitability investment and growth of china and india during 1980 2003 summary this paper documents the diverging patterns of capital accumulation profit rates investment rates capital productivity and technological progress of china and india between 1980 and 2003 the two asian economies have followed very different growth patterns and today they face different challenges india s is how to accelerate growth while china s policy makers debate between the need to maintain a high growth rate to generate employment and the imperative to reduce it to cool the economy india must address impediments to investment china must deal with the question of whether investment can continue being the main source of growth

average monotonic cooperative games abstract a subclass of monotonic transferable utility t u games is studied average monotonic games these games are totally balanced we prove that the core coincides with both the bargaining set a la davis and maschler and the bargaining set a la mas colell to obtain this result a technique based on reduced games is used journal of economic literature classification number c71

on cost sharing in the provision of a binary and excludable public good we study efficiency and fairness properties of the equal cost sharing with maximal participation ecsmp mechanism in the provision of a binary and excludable public good according to the maximal welfare loss criterion the ecsmp is optimal within the class of strategyproof individually rational and no deficit mechanisms only when there are two agents in general the ecsmp mechanism is not optimal we provide a class of mechanisms obtained by symmetric perturbations of ecsmp with strictly lower maximal welfare loss we show that if one of two possible fairness conditions is additionally imposed the ecsmp mechanism becomes optimal

misselling through agents this paper analyzes the implications of the inherent conflict between two tasks performed by direct marketing agents prospecting for customers and advis ing on the product s suitability for the specific needs of customers when structuring salesforce compensation firms trade off the expected losses from misselling unsuitable products with the agency costs of providing market ing incentives we characterize how the equilibrium amount of misselling and thus the scope of policy intervention depends on features of the agency problem including the internal organization of a firm s sales process the transparency of its commission structure and the steepness of its agents sales incentives jel m31 m37 m52 when purchasing unfamiliar products consumers often rely on information and advice pro vided by representatives of the seller this creates the possibility of misselling the question able practice of a salesperson selling a product that may not match a customer s specific needs 1 this problem is particularly severe in markets for technically complex products such as con sumer electronics auto repairs medical care and retail financial services including securities pensions insurance policies and mortgages an important feature of these markets is that the seller often deals with the customer through an agent rather than directly for example financial brokers typically recommend purchase of a specific product after inquiring about their customers particular circumstances and needs the possibility of abuse has led to regulation in some of these markets most notably for securities transactions the financial industry regulatory authority finra the major self regulatory organization for securities firms operating in the united states mandates that broker dealers make a reasonable effort to obtain information about the individual characteristics of their noninstitutional cus tomers and to ensure that their recommendations are suitable to customers financial situations

weakly monotonic solutions for cooperative games abstract the principle of weak monotonicity for cooperative games states that if a game changes so that the worth of the grand coalition and some player s marginal contribution to all coalitions increase or stay the same then this player s payoff should not decrease we investigate the class of values that satisfy efficiency symmetry and weak monotonicity it turns out that this class coincides with the class of egalitarian shapley values thus weak monotonicity reflects the nature of the egalitarian shapley values in the same vein as strong monotonicity reflects the nature of the shapley value an egalitarian shapley value redistributes the shapley payoffs as follows first the shapley payoffs are taxed proportionally at a fixed rate second the total tax revenue is distributed equally among all players

why has china succeeded and why it will continue to do so the key factor underlying china s fast development during the last 50 years is its ability to master and accumulate new and more complex capabilities reflected in the increase in diversification and sophistication of its export basket this accumulation was policy induced and not the result of the market and began before 1979 during the last 50 years china has acquired revealed comparative advantage in the export of both labour intensive products following its factor abundance and sophisticated products although the latter does not mean that there was leapfrogging china is exceptionally well positioned especially taking into account its income per capita to continue learning and gaining revealed comparative advantage in the export of more sophisticated products given adequate policies carefully thought out and implemented reforms and skilful management of constraints and risks china has the potential to continue thriving this does not mean however that high growth will continue indefinitely

a literature study for dea applied to energy and environment abstract this study systematically summarizes previous research efforts on data envelopment analysis dea applied to energy and environment in the past four decades including concepts and methodologies on dea environmental assessment industrial developments are very important for all nations in terms of their economic prosperities a problem is that the development produces various pollutions on air water and other types of contaminations all of which are usually associated with our health problems and climate changes thus it is necessary for us to consider how to make a balance between economic success and pollution mitigation to maintain a high level of social sustainability in the world it is widely considered that dea is one of the methodologies to examine the level of sustainability this study examines a recent research trend on dea applications from 1980s to 2010s nowadays many researchers have paid serious attention on how to combat various difficulties in the areas of energy and environment as a result the number of articles on dea applications on energy and environment has dramatically increased particularly after 2000s however it is true that dea has strengths and drawbacks in the applications therefore it is very important for us to carefully use dea for guiding large policy issues and business strategies such as the global warming and climate change an underlying premise of this study is that technology innovation in engineering and natural science may solve various problems by linking it with political and managerial efforts the use of dea provides a methodological linkage among them so enhancing the practicality in mitigating problems due to climate change and environmental pollutions this literature study along with a summary on conceptual and methodological developments provides us with guidelines for our future research works on dea on energy and environment issues

an application of the shapley value to fair division with money the author considers fair division when monetary compensations are feasible and utilities are quasi linear four axioms are discussed individual rationality resource monotonicity population solidarity and the stand alone test the latter views the utility from consuming all the goods as an upper bound on every coalition s actual joint utility under efficiency the four axioms show little compatibility however when the goods have enough substitutability in everyone s preferences the shapley value of the surplus sharing game satisfies all four axioms an example is the optimal assignment of indivisible goods when every agent consumes only one good copyright 1992 by the econometric society

cooperation in service systems we consider a number of servers that may improve the efficiency of the system by pooling their service capacities to serve the union of the individual streams of customers this economies of scope phenomenon is due to the reduction in the steady state mean total number of customers in the system the question we pose is how the servers should split among themselves the cost of the pooled system when the individual incoming streams of customers form poisson processes and individual service times are exponential we define a transferable utility cooperative game in which the cost of a coalition is the mean number of customers or jobs in the pooled system we show that despite the characteristic function is neither monotone nor concave the game and its subgames possess nonempty cores in other words for any subset of servers there exist cost sharing allocations under which no partial subset can take advantage by breaking away and forming a separate coalition we give an explicit expression for all infinitely many nonnegative core cost allocations of this game finally we show that except for the case where all individual servers have the same cost there exist infinitely many core allocations with negative entries and we show how to construct a convex subset of the core where at least one server is being paid to join the grand coalition

uniform externalities two axioms for fair allocation abstract positive resp negative preference externalities say that an agent always prefers his actual welfare to his virtual welfare should other agents share his preferences resp prefers his virtual to his actual welfare negative group externalities say that an agent never prefers his actual welfare to his virtual welfare should he be the sole user of the resources these two axioms unify several familiar fairness properties and yield some new ideas as well in the division of unproduced commodities and the cooperative production of a private or a public good we also discuss their compatibility with no envy and resource monotonicity

bidding for the surplus a non cooperative approach to the shapley value 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

pooling of spare parts between multiple users how to share the benefits companies that maintain capital goods e g airplanes or power plants often face high costs both for holding spare parts and due to downtime of their technical systems these costs can be reduced by pooling common spare parts between multiple companies in the same region but managers may be unsure about how to share the resulting costs or benefits in a fair way that avoids free riders to tackle this problem we study several players each facing a poisson demand process for an expensive low usage item they share a stock point that is controlled by a continuous review base stock policy with full backordering under an optimal base stock level costs consist of penalty costs for backorders and holding costs for on hand stock we propose to allocate the total costs proportional to players demand rates our key result is that this cost allocation rule satisfies many appealing properties it makes all separate participants and subgroups of participants better off it stimulates growth of the pool it can be easily implemented in practice and it induces players to reveal their private information truthfully to obtain these game theoretical results we exploit novel structural properties of the cost function in our s 1 s inventory model

sharing a fish stock when distribution and harvest costs are density dependent we studied cooperative and competitive solutions for managing a trans boundary fish stock that has a stock size dependent distribution and harvesting costs using norwegian spring spawning nss herring clupea harengus as a case study this is among the first studies to investigate the effect of a dynamic distribution in a partition function game framework i e including externalities the special feature of nss herring is that it comes under the sole ownership of norway when the stock size is sufficiently low the three players in our game are differentiated by stock ownership cost per unit effort and stock elasticity of harvest we find that cost asymmetry improves the likelihood of forming a stable grand coalition as harvesting load can be assigned to each fishing zone according to a player s relative cost level and the density of fish a dynamic distribution increases the bargaining power of norway because of her ability to control both the total stock and the stock shares in different zones especially during the stock transition years however the bargaining power of norway may disappear if her cost of harvesting exceeds that of the other players this loss of bargaining power can take on two forms first a dynamic distribution may encourage a minor player to free ride because norway needing a coalition partner to improve her cost effectiveness would be less inclined to retaliate as retaliation hurts her ally as much as the free rider second in a stable grand coalition norway is not guaranteed to receive an allocation of benefit shares in proportion to not to say in excess of her stock ownership at the current stock condition the strategy where norway reduces stock abundance below the level where the stock becomes non migratory is found attractive only if the discounting rate is sufficiently high

core existence in vertically differentiated markets we prove that a sufficient condition for the core existence in a n firm vertically differentiated market is that the qualities of firms products are equispaced along the quality spectrum this result contributes to see that a fully collusive agreement among firms in such markets is more easily reachable when product qualities are not distributed too asymmetrically along the quality ladder

india and china contrasts in economic liberalization abstract it is argued that in both india and china despite some important differences 1 a similar cultural and political imperatives led to similar systems of dirigisme and economic outcomes with the chinese growth higher than the indian because of higher investment 2 b crises engendered by their dirigiste regimes impelled reform 3 c their attempts to replace the plan by the market have striking similarities but 4 d ultimately because of continuing atavistic attitudes to toward trade and commerce the reforms remain insecure

an ordinal shapley value for economic environments abstract we propose a new solution concept to address the problem of sharing a surplus among the agents generating it the problem is formulated in the preferences endowments space the solution is defined recursively incorporating notions of consistency and fairness and relying on properties satisfied by the shapley value for transferable utility tu games we show a solution exists and call it the ordinal shapley value osv we characterize the osv using the notion of coalitional dividends and furthermore show it is monotone and anonymous

coalitional games monotonicity and core abstract we characterize a monotonic core solution defined on the class of veto balanced games we also discuss what restricted versions of monotonicity are possible when selecting core allocations we introduce a family of monotonic core solutions for veto balanced games and we show that in general the per capita nucleolus is not monotonic

monotonic redistribution of non negative allocations a case for proportional taxation revisited we reconsider casajus forthcoming characterization of uniformly proportional taxation by three properties of redistribution efficiency symmetry and monotonicity when restricted to non negative income these properties imply proportional taxation in a weaker sense the tax rate may vary with total income but only in an economically reasonable way

the stochastic shapley value for coalitional games with externalities abstract a long debated but still open question in the game theory literature is that of how to extend the shapley value to coalitional games with externalities while previous work predominantly focused on developing alternative axiomatizations in this article we propose a novel approach which centers around the coalition formation process and the underlying probability distribution from which a suitable axiomatization naturally follows specifically we view coalition formation in games with externalities as a discrete time stochastic process we focus in particular on the chinese restaurant process a well known stochastic process from probability theory we show that reformulating shapley s coalition formation process as the chinese restaurant process yields in games with externalities a unique value with various desirable properties we then generalize this result by proving that all values that satisfy the direct translation of shapley s axioms to games with externalities can be obtained using our approach based on stochastic processes

a field study on matching with network externalities we study the effects of network externalities within a protocol for matching faculty to offices in a new building using web and survey data on faculty s attributes and choices we identify the different layers of the social network institutional affiliation coauthorships and friendships we quantify the effects of network externalities on choices and outcomes disentangle the layers of the networks and quantify their relative influence finally we assess the protocol used from a welfare perspective our study suggests the importance and feasibility of accounting for network externalities in assignment problems and evaluates techniques that can be employed to this end jel c78 c93 d62 d85 z13

misselling financial products the limits for internal compliance abstract a firm advises customers through an agent such as a mortgage broker who is incentivized through commissions and the threat of firing we show that this implies an upper boundary for the feasible standard of advice up to which the standard increases with commissions

economic reforms in india since 1991 has gradualism worked opinions on the causes of india s growth deceleration vary world economic growth was slower in the second half of the 1990s and that would have had some dampening effect but india s dependence on the world economy is not large enough for this to account for the slowdown critics of liberalization have blamed the slowdown on the effect of trade policy reforms on domestic industry however the opposite view is that the slowdown is due not to the effects of reforms but rather to the failure to implement the reforms effectively this in turn is often attributed to india s gradualist approach to reform which has meant a frustratingly slow pace of implementation however even a gradualist pace should be able to achieve significant policy changes over ten years this paper examines india s experience with gradualist reforms from this perspective

sharing a river among satiable agents abstract we consider the problem of efficiently sharing water from a river among a group of satiable agents since each agent s benefit function exhibits a satiation point the environment can be described as a cooperative game with externalities we show that the downstream incremental distribution is the unique distribution which both is fair according to the aspiration welfare principle and satisfies the non cooperative core lower bounds on the other hand the cooperative core may be empty furthermore the downstream incremental distribution satisfies all core lower bounds for all connected coalitions if and only if each agent s individual rationality constraint is independent of the behavior of the other agents

cooperation on capacitated inventory situations with fixed holding costs in this paper we analyze a situation in which several firms deal with inventory problems concerning the same type of product we consider that each firm uses its limited capacity warehouse for storing purposes and that it faces an economic order quantity model where storage costs are irrelevant and assumed to be zero and shortages are allowed in this setting we show that firms can save costs by placing joint orders and obtain an optimal order policy for the firms besides we identify an associated class of costs games which we show to be concave finally we introduce and study a rule to share the costs among the firms which provides core allocations and can be easily computed

auctioning and selling positions a non cooperative approach to queueing conflicts abstract complementary to the axiomatic and mechanism design studies on queueing problems this paper proposes a strategic bargaining approach to resolve queueing conflicts given a situation where players with different waiting costs have to form a queue in order to be served they firstly compete with each other for a specific position in the queue then the winner can decide to take up the position or sell it to the others in the former case the rest of the players will proceed to compete for the remaining positions in the same manner whereas for the latter case the seller can propose a queue with corresponding payments to the others which can be accepted or rejected in this paper we show that when the players are competing for the first position in the queue then the subgame perfect equilibrium outcome of the corresponding mechanism coincides with the well known maximal transfer rule while an efficient queue is always formed in equilibrium we also argue that changing the mechanism so that the players compete for the last position implements the minimal transfer rule the analysis discovers a striking relationship between pessimism and optimism in this type of decision making

bargaining and cooperation in strategic form games in this paper we view bargaining and cooperation as an interaction superimposed on a game in strategic form a multistage bargaining procedure for n players the proposer commitment procedure is presented it is inspired by nash s two player variable threat model a key feature is the commitment to threats we establish links to classical cooperative game theory solutions such as the shapley value in the transferable utility case however we show that even in standard pure exchange economies the traditional coalitional function may not be adequate when utilities are not transferable jel c70 c71 c78 d70

secession and value abstract a model with random proposals where secession of coalitions is the only threat yields exploitative allocations if proposals for coalition s involve randomization the responders pay off vector consists of shapley values for coalition sizes ranging from 1 to s 1

population monotonic allocation schemes for cooperative games with transferable utility abstract an allocation scheme for a cooperative game specifies how to allocate the worth of every coalition it is population monotonic if each player s payoff increases as the coalition to which he belongs grows larger we show that essentially a game has a population monotonic allocation scheme pmas if and only if it is a positive linear combination of monotonic simple games with veto control a dual characterization is also provided sufficient conditions for the existence of a pmas include convexity and increasing average marginal contributions if the game is convex its extended shapley value is a pmas classification number 026

monotonicity of social welfare optima abstract this paper considers the problem of maximizing social welfare subject to participation constraints it is shown that for an income allocation method that maximizes a social welfare function there is a monotonic relationship between the incomes allocated to individual agents in a given coalition with at least three members and its participation constraint if and only if the aggregate income to that coalition is always maximized an impossibility result demonstrates that there is no welfare maximizing allocation method in which agents individual incomes monotonically increase in society s income thus for any such allocation method there are situations where some agents have incentives to prevent society in becoming richer

an empirical study on coalition formation and cost savings allocation abstract interest has been raised by the recent identification of potential savings through collaborative planning in logistics operations even though substantial savings can be realized two key questions exist i how should potential savings be divided among a group of collaborating companies and ii among potential collaborating companies how should collaborating group s be formed these two questions are studied in a specific context among potential collaborating companies a subset denoted the leading companies performs collaborative planning on behalf of the others and together they initiate formation of a collaborating group we use the concept of a business model to detail such context based on the literature on network formation where potential savings are modelled by a cooperative game four business models are explored in four different subsets of leading companies we propose a network model as a method to determine the stable collaborating group in each computation a case study including eight forest companies is described and analyzed results show that very different solution characteristics can be achieved depending on the business model selected

determinants of household energy consumption in india improving access to affordable modern energy is critical to improving living standards in the developing world rural households in india in particular are almost entirely reliant on traditional biomass for their basic cooking energy needs this has adverse effects on their health and productivity and also causes environmental degradation this study presents a new generic modelling approach with a focus on cooking fuel choices and explores response strategies for energy poverty eradication in india the modelling approach analyzes the determinants of fuel consumption choices for heterogeneous household groups incorporating the effect of income distributions and traditionally more intangible factors such as preferences and private discount rates the methodology is used to develop alternate future scenarios that explore how different policy mechanisms such as fuel subsidies and micro financing can enhance the diffusion of modern more efficient energy sources in india

endogenous formation of coalitions the formation of coalitions is a fundamental problem in game theory by a coalition is meant a group of players e g economic or political agents which decide to act together as one unit relative to the rest of the players this includes the instances of syndicates unions cartels blocks political parties parliamentary coalitions etc we would like to emphasize that forming a coalition does not eliminate the individual players as decision makers in all interactions with the other players coalition members act as one unit it may be useful to think of a representative agent taking their place 2 however this arrangement will continue only as long as each player finds it desirable to act this way further bargaining occurs among the members of each coalition on how to divide what they obtained together thus the existence of coalitions implies that the interactions among the players will be conducted on two levels first among the coalitions and second within each coalition most of the existing models in economics and game theory assume that the coalition structure is given exogenously instead we try here to obtain it as an endogenous outcome of our model namely we want to be able to predict which coalitions will in fact form in each given situation 3 our theory combines two kinds of game theoretic concepts value and stability the basic idea is first to evaluate the players prospects in the various coalition structures and then based on these values to find which ones are stable we will call this value coalition structure value or cs value for short the reason we are considering coalition structures i e partitions of the set of players into disjoint coalitions rather than just coalitions is that in general players may find it to their advantage to join forces in some situations and to act separately in others all depending on the way the other participants are organized this implies that both the value and the stability concepts should depend on the entire coalition structure the cs value we analyze in this paper was first developed by owen 7

rational bargaining in games with coalitional externalities this paper provides a flexible strategic framework to analyze bargaining and values in environments with coalitional externalities within this framework we propose a new value that extends the shapley value to partition function form games the so called rational belief shapley rbs value we investigate the strategic foundation of the rbs value by constructing an implementation mechanism this mechanism extends existing models of multilateral bargaining by allowing players a higher degree of freedom to form coalitions the same framework of bidding and renegotiation allows for natural variations of the rbs mechanism in this way alternative shapley like values are obtained and a unified platform to analyze and compare these solutions is provided

analyzing historical and regional patterns of technical change from a classical marxian perspective abstract this paper analyzes whether technical change follows the labor saving capital using marx biased pattern this form of technical innovation underlies marx s explanation of the falling rate of profit long term data for industrialized societies reveal such pattern punctuated by a phase in which both inputs present an increase in productivity regional data from the penn world table supplemented by our standardized net capital stock estimate reveals that most of the world regions have followed the marx biased technical change over the period 1964 1990 however the non marx biased pattern appears in some world regions in the 1980s

rethinking economy wide rebound measures an unbiased proposal in spite of having been first introduced in the last half of the ninetieth century the debate about the possible rebound effects from energy efficiency improvements is still an open question in the economic literature this paper contributes to the existing research on this issue proposing an unbiased measure for economy wide rebound effects the novelty of this economy wide rebound measure stems from the fact that not only actual energy savings but also potential energy savings are quantified under general equilibrium conditions our findings indicate that the use of engineering savings instead of general equilibrium potential savings downward biases economy wide rebound effects and upward biases backfire effects the discrepancies between the traditional indicator and our proposed measure are analysed in the context of the spanish economy

a comprehensive review of data envelopment analysis dea approach in energy efficiency the main aim of this review article is to review of dea models in regarding to energy efficiency this paper reviewed and summarized the different models of dea that have been applied around the world to development of energy efficiency problems consequently a review of 144 published scholarly papers appearing in 45 high ranking journals between 2006 and 2015 have been obtained to achieve a comprehensive review of dea application in energy efficiency accordingly the selected articles have been categorized based on year of publication author s nationalities scope of study time duration application area study purpose results and outcomes results of this review paper indicated that dea showed great promise to be a good evaluative tool for future analysis on energy efficiency issues where the production function between the inputs and outputs was virtually absent or extremely difficult to acquire

differentially monotonic redistribution of income we suggest a differential version of monotonicity for redistribution rules whenever the differential of two persons income weakly increases then the differential of their post redistribution rewards also weakly increases together with efficiency and non negativity differential monotonicity characterizes redistribution via taxation at a fixed rate and equal distribution of the total tax revenue

group strategyproof cost sharing the role of indifferences every agent reports his willingness to pay for one unit of a good a mechanism allocates goods and cost shares to some agents we characterize the group strategyproof gsp mechanisms under two alternative continuity conditions interpreted as tie breaking rules with the maximalist rule max an indifferent agent is always served with the minimalist rule min an indifferent agent does not get a unit of the good gsp and max characterize the cross monotonic mechanisms these mechanisms are appropriate whenever symmetry is required on the other hand gsp and min characterize the sequential mechanisms these mechanisms are appropriate whenever there is scarcity of the good our results are independent of an underlying cost function they unify and strengthen earlier results for particular classes of cost functions

production inventory games a new class of totally balanced combinatorial optimization games in this paper we introduce a new class of cooperative games that arise from production inventory problems several agents have to cover their demand over a finite time horizon and shortages are allowed each agent has its own unit production inventory holding and backlogging cost cooperation among agents is given by sharing production processes and warehouse facilities agents in a coalition produce with the cheapest production cost and store with the cheapest inventory cost we prove that the resulting cooperative game is totally balanced and the owen set reduces to a singleton the owen point based on this type of allocation we find a population monotonic allocation scheme for this class of games finally we point out the relationship of the owen point with other well known allocation rules such as the nucleolus and the shapley value

population monotonicity in a general model with indivisible goods abstract we show that in a model with indivisible goods where each agent can receive more than one indivisible good there are no population monotonic selections from the pareto solution however if substitutability is imposed on preferences the shapley solution satisfies population monotonicity

on the externality free shapley shubik index abstract we address the problem of extending the shapley shubik index to the class of simple games with externalities introduced in alonso meijide et al 2017 on the one hand we provide bounds for any efficient symmetric and monotonic power index on the other hand we characterize the restriction of the externality free value of de clippel and serrano 2008 to the class of games under study by adapting well known properties

equality of resources implies equality of welfare if one is an egalitarian should one try to equalize resources available to agents or to equalize their welfares with a suitably general conception of what resources are these two conceptions cannot be distinguished an allocation mechanism is defined on a space of economies and is required to satisfy various axioms that are necessary conditions for equalizing resources among a population the unique mechanism satisfying these axioms on a large domain of economies is the one that allocates commodities so as to equalize utilities of the agents methodologically the theorem is a generalization of bargaining theory because the mechanisms are defined on commodity space

welfare bounds in the fair division problem to any anonymous division method corresponds a lower and an upper bound function they measure the impact on a given agent s utility of the other agents preferences the highest lower bound is the equal split utility the lowest upper bound is the indirect utility from equal split at a canonical price these two bounds are compatible yet any method with the elqual split lower bound exhibits the growth paradox and any method with the lowest upper bound generates envy we criticize competitive equilibrium from equal split because it puts no finite upper bound on any agent s welfare

the adviser effect on insurance disclosures abstractan examination of personal and medical disclosures made by retail customers to a commercial life insurer reveals that customers screened for insurance with the assistance of a financial adv

egalitarian equivalent cost sharing of a public good in an economy with one public and one private good egalitarian equivalent cost sharing consists of finding the highest public good level x such that consuming x for free yields a feasible utility distribution the corresponding feasible allocation typically unique called egalitarian equivalent is in the core of the economy conversely any cost sharing method satisfying pareto optimality cost monotonicity nobody suffers a utility loss if the production technology improves upon ceteris paribus and individual rationality no single agent coalition objects or no private transfers no agent receives a positive amount of private good must select an egalitarian equivalent allocation in every economy copyright 1987 by the econometric society

conflicts of interest information provision and competition in the financial services industry abstract in some markets sellers have better information than buyers over which products best serve a buyer s needs depending on the market structure this may lead to conflicts of interest in the provision of information by sellers this paper studies this issue in the market for financial services the analysis presents a new model of competition between banks where price competition influences the ensuing incentives for truthful information revelation we also compare conflicts of interest in two different firm structures specialized banking and one stop banking

no envy and consistency in economies with indivisible goods we consider the problem of fair allocation in economies with indivisible goods our main objective is to identify appealing subsolutions of the no envy solution we formulate desirable properties of solutions and look for solutions satisfying them given an allocation chosen by a solution for some economy and given a subgroup of the agents consider the problem of fairly distributing among its members the resources that this group has collectively received the solution is consistent if it recommends that the same bundle be attributed to each of these agents as initially we show that there is no proper subsolution of the no envy solution that satisfies consistency however many subsolutions satisfy bilateral consistency or the converse of consistency but again there is no proper subsolution satisfying these two properties together

a characterization of the shapley value in queueing problems a set of agents stand to receive a service no two agents can be served simultaneously a queue has been organized and agents having to wait should receive monetary compensations we characterize the rule assigning positions in the queue and compensations corresponding to the payoffs recommended by the shapley value of the associated cooperative game

the rebound effect some empirical evidence from india abstract the present paper looks at the effect of technical efficiency gains on energy use in three sectors in india at varying levels of aggregation high positive rebound implies that efficient technology unless supplemented by appropriate pricing policy will not be successful in containing demand however the main purpose of the paper is to focus on the unique mechanism of rebound that may occur in developing countries with unmet demand

inventory games with permissible delay in payments abstract meca et al 2004 studied a class of inventory games which arise when a group of retailers who observe demand for a common item decide to cooperate and make joint orders with the eoq policy in this paper we extend their model to the situation where retailer s delay in payments is permitted by the supplier we introduce the corresponding inventory game with permissible delay in payments and prove that its core is nonempty then a core allocation rule is proposed which can be reached through population monotonic allocation scheme under this allocation rule the grand coalition is shown to be stable from a farsighted point of view

china s economic growth 1978 2025 what we know today about china s economic growth tomorrow summary this paper examines china s future growth prospects and the potential drivers of future growth using two approaches it first asks in how far china s recent economic development matches standard growth patterns identified in development economics and trade theory second gdp is decomposed into income components which in turn are explained for the reform period by the quantity and quality of labor future gdp can then be re composed from future labor data available today overall china s economic growth is likely to continue at current rates through 2015 before it gradually slows such a growth has numerous implications

the stability of hedonic coalition structures we consider the partitioning of a society into coalitions in purely hedonic settings i e where each player s payoff is completely determined by the identity of other members of her coalition we first discuss how hedonic and nonhedonic settings differ and some sufficient conditions for the existence of core stable coalition partitions in hedonic settings we then focus on a weaker stability condition individual stability where no player can benefit from moving to another coalition while not hurting the members of that new coalition we show that if coalitions can be ordered according to some characteristic over which players have single peaked preferences or where players have symmetric and additively separable preferences then there exists an individually stable coalition partition examples show that without these conditions individually stable coalition partitions may not exist we also discuss some other stability concepts and the incompatibility of stability with other normative properties journal of economic literature classification numbers c71 a14 d20

efficient bidding with externalities we implement a family of efficient proposals to share benefits generated in environments with externalities these proposals extend the shapley value to games with externalities and are parametrized through the method by which the externalities are averaged we construct two slightly different mechanisms one for environments with negative externalities and the other for positive externalities we show that the subgame perfect equilibrium outcomes of these mechanisms coincide with the sharing proposals

lloyd shapley s matching and game theory this is a survey of lloyd shapley s contributions to matching theory and game theory in general starting with the work that inspired the swedish academy to award the 2012 nobel memorial prize in economic sciences to lloyd shapley and alvin roth

the pure compensation problem egalitarianism versus laissez fairism a binary choice problem with side payments and quasi linear utilities is considered we study two compensation rules called social choice functions the egalitarian rule divides equally the surplus above the average utility level the laissez faire rule chooses an efficient decision but performs no transfer egalitarianism is characterized by a monotonicity axiom called agreement no two agents ever disagree in comparing two distinct preferences of a third one laissez fairism is characterized by the no subsidy axiom a coalition would not be worse off if the other agents were not present

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 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

multiple public goods lexicographic preferences and single plateaued preference rules abstract we study the problem of providing a menu of identical public goods for a group of agents with single peaked preferences over 0 1 a decision rule selects for each preference profile and for each public good a location in miyagawa 1998a phd dissertation an agent consumes of each menu without rivalry only his most preferred public good we extend preferences from 0 1 to the set of alternatives lexicographically we identify a certain agent who might leave and require population monotonicity only if he leaves the entire population when we provide two public goods we characterize the class of single plateaued preference rules by pareto optimality anonymity and population monotonicity

fair allocation of indivisible goods and criteria of justice a set of n objects and an amount m of money is to be distributed among m people example the objects are tasks and the money is compensation from a fixed budget an elementary argument via constrained optimization shows that for m sufficiently large the set of efficient envy free allocations is nonempty and has a nice structure in particular various criteria of justice lead to unique best fair allocations that are well behaved with respect to changes of m this is in sharp contrast to the usual fair division theory with divisible goods

sharing the surplus an extension of the shapley value for environments with externalities economic activities both on the macro and micro level often entail wide spread externalities this in turn leads to disputes regarding the compensation levels to the various parties affected we propose a method of deciding upon the distribution of the gains costs of cooperation in the presence of externalities when forming the grand coalition is efficient we show that any sharing rule satisfying efficiency linearity dummy player and a strong symmetry axioms can be obtained through an average game adding an additional axiom we identify one unique rule satisfying these properties