Backward induction foundations of the Shapley value

McQuillin, Ben and Sugden, Robert (2016) Backward induction foundations of the Shapley value. Econometrica, 84 (6). 2265–2280. ISSN 0012-9682

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We present a noncooperative game model of coalitional bargaining, closely based on that of Gul (1989) but solvable by backward induction. In this game, Gul's condition of “value additivity” does not suffice to ensure the existence of a subgame perfect Nash equilibrium that supports the Shapley value, but a related condition—“no positive value-externalities”—does. Multiple equilibria can arise only in the event of ties, and with a mild restriction on tie-break rules these equilibria all support the Shapley value.

Item Type: Article
Uncontrolled Keywords: shapley value,nash program,noncooperative coalitional bargaining
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Pure Connector
Date Deposited: 24 Sep 2016 00:18
Last Modified: 19 Apr 2023 16:30
DOI: 10.3982/ECTA13191

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