Endogeneously arising network allocation rules

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Abstract

In this paper we study endogenously arising network allocation rules. We focus on three allocation rules: the Myerson value, the position value and the component-wise egalitarian solution. For any of these three rules we provide a characterization based on component efficiency and some balanced contribution property. Additionally, we present three mechanisms whose equilibrium payoffs are well defined and coincide with the three rules under consideration if the underlying value function is monotonic. Nonmonotonic value functions are shown to deal with allocation rules applied to monotonic covers. The mechanisms are inspired by the implementation of the Shapley value by P´erez-Castrillo and Wettstein (2001). We conclude with some comments on this implementation of the Shapley value.
Original languageEnglish
Place of PublicationEindhoven
PublisherTechnische Universiteit Eindhoven
Number of pages26
ISBN (Print)90-386-0736-9
Publication statusPublished - 2006

Publication series

NameBETA publicatie : working papers
Volume172
ISSN (Print)1386-9213

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