For games in partition function form, we explore the implications of distinguishing between the concepts of intrinsic marginal contributions and externalities. If one requires efficiency for the grand coalition, we provide several results concerning extensions of the Shapley value. Using the axioms of efficiency, anonymity, marginality and monotonicity, we provide upper and lower bounds to players' payoffs when affected by external effects, and a characterization of an ``externality-free'' value. If the grand coalition does not form, we characterize a payoff configuration on the basis of the principle of balanced contributions. We also analyze a game of coalition formation that yields sharp predictions Keywords:. externalities, marginal contributions, Shapley value, Pigouvian transfers, coalition formation JEL classification:. C7, D62 Abstract For games in partition function form, we explore the implications of distinguishing between the concepts of intrinsic marginal contributions and externalities. If one requires efficiency for the grand coalition, we provide several results concerning extensions of the Shapley value. Using the axioms of efficiency, anonymity, marginality and monotonicity, we provide upper and lower bounds to players' payoffs when affected by external effects, and a characterization of an "externality-free" value. If the grand coalition does not form, we characterize a payoff configuration on the basis of the principle of balanced contributions. We also analyze a game of coalition formation that yields sharp predictions. JEL classification numbers: C7, D62

No abstract

A key feature of arbitration is the possibility for conflicting parties to participate in the selection of the arbitrator, the individual who will rule the case. We analyze this problem of the selection of arbitrators from the perspective of implementation theory. In particular, theoretical analyses document problems with veto-rank—a simultaneous procedure commonly used in practice—and develop a new sequential procedure—shortlisting—with better properties. Experimental results are consistent with the theoretical predictions, highlighting both the disadvantages associated with the veto-rank procedure and the advantages associated with the shortlisting procedure. (JEL D71, D72)

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Among the most important and robust violations of rationality are the attraction and the compromise effects. The compromise effect refers to the tendency of individuals to choose an intermediate option in a choice set, while the attraction effect refers to the tendency to choose an option that dominates some other options in the choice set. This paper argues that both effects may result from an individual's attempt to overcome the difficulty of making a choice in the absence of a single criterion for ranking the options. Moreover, we propose to view the resolution of this choice problem as a cooperative solution to an intrapersonal bargaining problem among different selves of an individual, where each self represents a different criterion for choosing. We first identify a set of properties that characterize those choice correspondences that coincide with our bargaining solution, for some pair of preference relations. Second, we provide a revealed-preference foundation to our bargaining solution and characterize the extent to which these two preference relations can be uniquely identified. Alternatively, our analysis may be reinterpreted as a study of (interpersonal) bilateral bargaining over a finite set of options. In that case, our results provide a new characterization, as well as testable implications, of an ordinal bargaining solution that is previously discussed in the literature under the various names of fallback bargaining, unanimity compromise, Rawlsian arbitration rule, and KantRawls social compromise. Terms of use: Documents in