A Compromise Stable Extension of Bankruptcy Games: Multipurpose Resource Allocation

18 Pages Posted: 19 Mar 2011 Last revised: 20 Apr 2011

See all articles by Peter Borm

Peter Borm

Tilburg University - Center for Economic Research (CentER); Tilburg University - Department of Econometrics & Operations Research

Soesja Grundel

Center for Economic Research (CentER) - Tilburg University

Herbert Hamers

Tilburg University - Center for Economic Research (CentER); Tilburg University - Department of Econometrics & Operations Research

Date Written: March 14, 2011

Abstract

This paper considers situations characterized by a common-pool resource, which needs to be divided among agents. Each of the agents has some claim on this pool and an individual reward function for assigned resources. This paper analyzes not only the problem of maximizing the total joint reward, but also the allocation of these rewards among the agents. Analyzing these situations a new class of transferable utility games is introduced, called multipurpose resource games. These games are based on the bankruptcy model, as introduced by O'Neill (1982). It is shown that every multipurpose resource game is compromise stable. Moreover, an explicit expression for the nucleolus of these games is provided.

Keywords: bankruptcy games, compromise stability, nucleolus

JEL Classification: C71

Suggested Citation

Borm, Peter E. M. and Grundel, Soesja and Hamers, Herbert, A Compromise Stable Extension of Bankruptcy Games: Multipurpose Resource Allocation (March 14, 2011). CentER Discussion Paper No. 2011-029. Available at SSRN: https://ssrn.com/abstract=1785326 or http://dx.doi.org/10.2139/ssrn.1785326

Peter E. M. Borm

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg University - Department of Econometrics & Operations Research

Tilburg, 5000 LE
Netherlands

Soesja Grundel (Contact Author)

Center for Economic Research (CentER) - Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Herbert Hamers

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 4666 2660 (Phone)

Tilburg University - Department of Econometrics & Operations Research

Tilburg, 5000 LE
Netherlands

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