An Egalitarian Value for Cooperative Games with Incomplete Information

Abstract

A bargaining solution concept generalizing the Harsanyi NTU value is defined for cooperative games with incomplete information. Our definition of a cooperative solution implies that all coalitional threats are equitable when players make interpersonal utility comparisons in terms of some virtual utility scales. In contrast, Myerson’s (1984b) generalization of the Shapley NTU value is only equitable for the grand coalition. When there are only two players, the two solutions are easily seen to coincide, however they may differ for general n-person games. By using the concept of virtual utility, our bargaining solution reflects the fact that players negotiate at the interim stage.

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Reference

Andrés Salamanca Lugo, “An Egalitarian Value for Cooperative Games with Incomplete Information”, TSE Working Paper, n. 16-620, February 2016, revised April 2017.