Values for Environments with Externalities - The Average Approach

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Working paper
Inés Macho-Stadler, David Pérez-Castrillo and David Wettstein
Issue number: 
Barcelona GSE Working Paper
Barcelona Graduate School of Economics
We propose the average approach,where the worth of a coalition is a weighted average of its worth for different 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 find a family of values that satisfy the properties.
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