A simple bargaining procedure for the Myerson value

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Abstract

We consider situations where the cooperation and negotiation possibilities between pairs of agents are given by an undirected graph. Every connected component of agents has a value, which is the total surplus the agents can generate by working together. We present a simple, sequential, bilateral bargaining procedure, in which at every stage the two agents in a link, (i,j) bargain about their share from cooperation in the connected component they are part of. We show that this procedure yields the Myerson value (Myerson, 1997) if the marginal value of any link in a connected component is increasing in the number of links in that connected component.

Original languageEnglish
Pages (from-to)131-150
Number of pages20
JournalThe B.E. Journal of Theoretical Economics
Volume13
Issue number1
Early online date1 May 2013
DOIs
Publication statusPublished - May 2013

Keywords

  • Myerson value
  • networks
  • bargaining
  • cooperation
  • LINK FORMATION
  • SURPLUS
  • GAMES
  • IMPLEMENTATION
  • NETWORKS
  • MODEL

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