Values for Environments with Externalities - The Average Approach


We propose the average approach,where the worth of a coalition is a weighted average of its worth for di⁄erent partitions of the playersset, 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 -egalitarian Shapley value, and the least-square family. For each of the rst 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 nd a family of values that satisfy the properties.

Published as: Values for environments with externalities - The average approach in Games and Economic Behavior , Vol. 108, 49-64, March, 2018