An Almost Ideal Sharing Scheme for Coalition Games with Externalities
Data
01.01.2004
01.01.2004
Autori
Johan Eyckmans, Michael Finus
Codice JEL
C70,C71
C70,C71
Parole chiave:
Coalition games,Partition function,Externalities,Sharing schemes
Coalition games,Partition function,Externalities,Sharing schemes
Publisher
Climate Change and Sustainable Development
Climate Change and Sustainable Development
Editor
Carlo Carraro
Carlo Carraro
We propose a class of sharing schemes for the distribution of the gains from cooperation for coalition games with externalities. In the context of the partition function, it is shown that any member of this class of sharing schemes leads to the same set of stable coalitions in the sense of d’Aspremont et al. (1983). These schemes are “almost ideal” in that they stabilize these coalitions which generate the highest global welfare among the set of “potentially stable coalitions”. Our sharing scheme is particularly powerful for economic problems that are characterized by positive externalities from coalition formation and which therefore are likely to suffer from severe free-riding.