Area	Decision Sciences
	Faculty	Frank Huettner
	Journal	Games and Economic Behavior
	Title	Random partitions, potential, value, and externalities

Professor Frank Huettner of Sungkyunkwan University’s SKK GSB has published a paper in the prestigious journal Games and Economic Behavior on a method for plausibly distributing benefits, even when outsiders can exert externalities. Professor Huettner, along with Professor André Casajus of HHL Leipzig Graduate School of Management and Professor Yukihiko Funaki of Waseda University, conducted research on the Shapley value and its extensions.

Abstract

The Shapley value equals a player's contribution to the potential of a game. The potential is a most natural one-number summary of a game, which can be computed as the expected accumulated worth of a random partition of the players. This computation integrates the coalition formation of all players and readily extends to games with externalities. We investigate those potential functions for games with externalities that can be computed this way. It turns out that the potential that corresponds to the MPW solution introduced by Macho-Stadler et al. (2007, J. Econ. Theory 135, 339–356) is unique in the following sense. It is obtained as the expected accumulated worth of a random partition, it generalizes the potential for games without externalities, and it induces a solution that satisfies the null player property even in the presence of externalities.

For Further Information, please check the following link:

https://www.sciencedirect.com/science/article/abs/pii/S089982562400085X?via%3Dihub

Keywords

player contribution, game summary, externalities, subgames