The Compromise Value for Cooperative Games with Random Payoffs
CentER Working Paper No. 2000-98
16 Pages Posted: 6 Nov 2000
The compromise value is introduced for cooperative games with random payoffs, that is, for cooperative games where the payoff to a coalition of players is a random variable. It is a compromise between utopia payoffs and minimal rights. This solution concept is based on the compromise value for NTU games and the 1/2 -value for TU games. It is shown that the nonempty core of a game is bounded by the utopia payoffs and the minimal rights. Further, we show that the compromise value of a cooperative game with random payoffs is determined by the 1/2 -value of a related TU game if the players have special types of preferences. Finally, the compromise value and the marginal value, which is defined as the average of the marginal vectors, coincide on the class of one- and two-person games.
Keywords: Cooperative games, random variables, compromise value, core
JEL Classification: C71
Suggested Citation: Suggested Citation