Coalition structure values in differential information economies: Is unity a strength?

Stefan Krasa, Akram Temimi, Nicholas C. Yannelis

Research output: Contribution to journalArticlepeer-review

Abstract

The coalition structure (CS) value, introduced by Owen [G. Owen, Values of games with a priori unions, in: Essays in Mathematical Economics and Game Theory, Springer Verlag, Berlin, 1977] and Hart and Kurz [Econometrica 51 (1983) 1047], generalizes the Shapley value to social situations where coalitions form for the purpose of bargaining. This paper introduces the CS value to economies with differential information. We show that the private CS values exists and is Bayesian incentive compatible. Moreover, we construct examples that go against the intuitive viewpoint that "unity is strength". In particular, we consider a three-person economy in which two agents bargain as a unit against the third agent. We show that bargaining as a unit is advantageous if and only if information is complete. This result sheds new light on bargaining under differential information.

Original languageEnglish (US)
Pages (from-to)51-62
Number of pages12
JournalJournal of Mathematical Economics
Volume39
Issue number1-2
DOIs
StatePublished - Feb 2003

Keywords

  • Bargaining
  • Coalition structure value
  • Differential information economies
  • Under differential information

ASJC Scopus subject areas

  • Economics and Econometrics
  • Applied Mathematics

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