TY - UNPB

T1 - Forming and Dissolving Partnerships in Cooperative Game Situations

AU - Platz, Trine Tornøe

AU - Østerdal, Lars Peter Raahave

N1 - JEL classification: C71, D63, D71

PY - 2010

Y1 - 2010

N2 - A group of players in a cooperative game are partners (e.g., as in the form of a union or a joint ownership) if the prospects for cooperation are restricted such that cooperation with players outside the partnership requires the accept of all the partners. The formation of such partnerships through binding agreements may change the game implying that players could have incentives to manipulate a game by forming or dissolving partnerships. The present paper seeks to explore the existence of allocation rules that are immune to this type of manipulation. An allocation rule that distributes the worth of the grand coalition among players, is called partnership formation-proof if it ensures that it is never jointly profitable for any group of players to form a partnership and partnership dissolution-proof if no group can ever profit from dissolving a partnership. The paper provides results on the existence of such allocation rules for general classes of games as well as more specific results concerning well known allocation rules.

AB - A group of players in a cooperative game are partners (e.g., as in the form of a union or a joint ownership) if the prospects for cooperation are restricted such that cooperation with players outside the partnership requires the accept of all the partners. The formation of such partnerships through binding agreements may change the game implying that players could have incentives to manipulate a game by forming or dissolving partnerships. The present paper seeks to explore the existence of allocation rules that are immune to this type of manipulation. An allocation rule that distributes the worth of the grand coalition among players, is called partnership formation-proof if it ensures that it is never jointly profitable for any group of players to form a partnership and partnership dissolution-proof if no group can ever profit from dissolving a partnership. The paper provides results on the existence of such allocation rules for general classes of games as well as more specific results concerning well known allocation rules.

KW - Faculty of Social Sciences

KW - cooperative games

KW - partnerships

KW - partnership formation-proof

KW - partnership dissolution-proof

M3 - Working paper

BT - Forming and Dissolving Partnerships in Cooperative Game Situations

PB - Department of Economics, University of Copenhagen

ER -