Marginal Contributions and Externalities in the Value

25 Pages Posted: 13 Dec 2005

See all articles by Geoffroy de Clippel

Geoffroy de Clippel

Brown University - Department of Economics

Roberto Serrano

Brown University

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.

Keywords: externalities, marginal contributions, Shapley value, Pigouvian transfers, coalition formation

JEL Classification: C7, D62

Suggested Citation

de Clippel, Geoffrey and Serrano, Roberto, Marginal Contributions and Externalities in the Value. Available at SSRN: https://ssrn.com/abstract=869260 or http://dx.doi.org/10.2139/ssrn.869260

Geoffrey De Clippel

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

Roberto Serrano (Contact Author)

Brown University ( email )

64 Waterman Street
Providence, RI 02912
United States
401-863-1036 (Phone)
401-863-1970 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
65
rank
336,353
Abstract Views
908
PlumX Metrics