We propose a new solution concept to address the problem of sharing a surplus among the agents generating it. The sharing problem is formulated in the preferences-endowments space. The solution is defined in a recursive manner 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 refer to it as an Ordinal Shapley value (OSV). The OSV associates with each problem an allocation as well as a matrix of concessions ``measuring'' the gains each agent foregoes in favor of the other agents. We analyze the structure of the concessions, and show they are unique and symmetric. Next we characterize the OSV using the notion of coalitional dividends, and furthermore show it is monotone in an agent's initial endowments and satisfies anonymity. Finally, similarly to the weighted Shapley value for TU games, we construct a weighted OSV as well.
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Paper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number
560.03.
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Sergiu Hart & Andreu Mas-Colell, 1994.
"Bargaining and Value,"
Economics Working Papers
114, Department of Economics and Business, Universitat Pompeu Fabra, revised Feb 1995.
[Downloadable!]
Barry O'Neill & Dov Samet & Zvi Wiener & Eyal Winter, 2002.
"Bargaining with an Agenda,"
Discussion Paper Series
dp315, Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem.
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