Implementing cooperative solution concepts: a generalized bidding approach
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This paper provides a framework for implementing and comparing several solution concepts for transferable utility cooperative games. We construct bidding mechanisms where players bid for the role of the proposer. The mechanisms differ in the power awarded to the proposer. The Shapley, consensus and equal surplus values are implemented in subgame perfect equilibrium outcomes as power shifts away from the proposer to the rest of the players. Moreover, an alternative informational structure where these solution concepts can be implemented without imposing any conditions of the transferable utility game is discussed as well.
KeywordsImplementation Bidding mechanism Shapley value Consensus value Equal surplus value
JEL ClassificationC71 C72 D62
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