Values for environments with externalities - The average approach

Recognition Program

Authors: Inés Macho-Stadler, David Pérez-Castrillo and David Wettstein

Games and Economic Behavior, Vol. 108, 49-64, March, 2018

We propose the “average approach,” where the worth of a coalition is a weighted average of its worth for different partitions of the players' set, as a unifying method to extend values for characteristic function form games. Our method allows us to extend the equal division value, the equal surplus value, the consensus value, the λ-egalitarian Shapley value, and the family of least-square values. For each of the first three extensions, we also provide an axiomatic characterization of a particular value for partition function form games. And for each of the last two extensions, we find a family of values that satisfy the properties.

This paper originally appeared as Barcelona School of Economics Working Paper 919
This paper is acknowledged by the Barcelona School of Economics Recognition Program