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A Generalization of the Harsanyi NTU Value to Games with Incomplete Information

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In this paper, we introduce a solution concept generalizing the Harsanyi non-transferable utility (NTU) value to cooperative games with incomplete information. The so-defined S-solution is characterized by virtual utility scales that extend the Harsanyi-Shapley fictitious weighted utility transfer procedure. We construct a three-player cooperative game in which Myerson’s [Cooperative games with incomplete information. Int. J. Game Theory, 13, 1984, pp. 69-96] generalization of the Shapley NTU value does not capture some “negative” externality generated by the adverse selection. However, when we explicitly compute the S-solution in this game, it turns out that it prescribes a more intuitive outcome which takes into account the above mentioned informational externality.

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  • Salamanca, Andrés, 2018. "A Generalization of the Harsanyi NTU Value to Games with Incomplete Information," Discussion Papers on Economics 5/2018, University of Southern Denmark, Department of Economics.
    • Handle: RePEc:hhs:sdueko:2018_005
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    1. de Clippel, Geoffroy, 2005. "Values for cooperative games with incomplete information: An eloquent example," Games and Economic Behavior, Elsevier, vol. 53(1), pages 73-82, October.
    2. Myerson, Roger B, 1983. "Mechanism Design by an Informed Principal," Econometrica, Econometric Society, vol. 51(6), pages 1767-1797, November.
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    4. Holmstrom, Bengt & Myerson, Roger B, 1983. "Efficient and Durable Decision Rules with Incomplete Information," Econometrica, Econometric Society, vol. 51(6), pages 1799-1819, November.
    5. Myerson, Roger B, 1984. "Two-Person Bargaining Problems with Incomplete Information," Econometrica, Econometric Society, vol. 52(2), pages 461-487, March.
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    8. Hart, Sergiu, 1985. "An Axiomatization of Harsanyi's Nontransferable Utility Solution," Econometrica, Econometric Society, vol. 53(6), pages 1295-1313, November.
    9. Hart, Sergiu, 1985. "Nontransferable Utility Games and Markets: Some Examples and the Harsanyi Solution," Econometrica, Econometric Society, vol. 53(6), pages 1445-1450, November.
    10. Roth, Alvin E, 1980. "Values for Games without Sidepayments: Some Difficulties with Current Concepts," Econometrica, Econometric Society, vol. 48(2), pages 457-465, March.
    11. Françoise Forges & Roberto Serrano, 2013. "Cooperative Games With Incomplete Information: Some Open Problems," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 15(02), pages 1-17.
    12. Sergiu Hart, 2004. "A comparison of non-transferable utility values," Theory and Decision, Springer, vol. 56(1), pages 35-46, April.
    13. repec:dau:papers:123456789/8158 is not listed on IDEAS
    14. Kalai, Ehud & Samet, Dov, 1985. "Monotonic Solutions to General Cooperative Games," Econometrica, Econometric Society, vol. 53(2), pages 307-327, March.
    15. Myerson, Roger B., 2007. "Virtual utility and the core for games with incomplete information," Journal of Economic Theory, Elsevier, vol. 136(1), pages 260-285, September.
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    Cited by:

    1. Salamanca, Andrés, 2020. "On the values of Bayesian cooperative games with sidepayments," Mathematical Social Sciences, Elsevier, vol. 108(C), pages 38-49.
    2. Andrés Salamanca, 2019. "A Comparison of NTU Values in a Cooperative Game with Incomplete Information," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 4(1), pages 109-117, November.
    3. Andrew J. Collins & Sheida Etemadidavan & Wael Khallouli, 2020. "Generating Empirical Core Size Distributions of Hedonic Games using a Monte Carlo Method," Papers 2007.12127, arXiv.org.

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    More about this item

    Keywords

    Cooperative games; incomplete information; virtual utility;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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