The Compromise Value for Cooperative Games with Random Payoffs

16 Pages Posted: 6 Nov 2000

See all articles by Judith Timmer

Judith Timmer

University of Twente - Department of Applied Mathematics

Abstract

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

Timmer, Judith, The Compromise Value for Cooperative Games with Random Payoffs. Mathematical Methods of Operations Research, Forthcoming, CentER Working Paper No. 2000-98, Available at SSRN: https://ssrn.com/abstract=249031 or http://dx.doi.org/10.2139/ssrn.249031

Judith Timmer (Contact Author)

University of Twente - Department of Applied Mathematics ( email )

P.O. Box 217
7500 AE Enschede
Netherlands

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