Population Monotonic Paths Schemes for Simple Games

Abstract

A path scheme for a simple game is composed of a path, i.e., a sequence of coalitions that is formed during the coalition formation process and a scheme, i.e., a payoff vector for each coalition in the path. A path scheme is called population monotonic if a player's payoff does not decrease as the path coalition grows. In this study, we focus on Shapley path schemes of simple games in which for every path coalition the Shapley value of the associated subgame provides the allocation at hand. We show that a simple game allows for population monotonic Shapley path schemes if and only if the game is balanced. Moreover, the Shapley path scheme of a specific path is population monotonic if and only if the first winning coalition that is formed along the path contains every minimal winning coalition. Extensions of these results to other probabilistic values are discussed.

Keywords: cooperative games, simple games, population monotonic path schemes, coalition formation, probabilistic values

JEL Classification: C71, D72