EMBR Seminar with Prof Matt Van Essen (Tennessee)

Equity Equilibrium for Cooperative Games

Abstract

We introduce a unifying stability concept to coalitional form cooperative games - the equity equilibrium. A central authority selects an outcome of the game to enforce and evaluates its stability using a collection of functions we call a "complaint system." Complaints are used to identify grievances against as well as concessions to each player. An equity equilibrium is an individually rational payoff configuration which balances the grievances and concessions of each player. We establish existence of equity equilibrium for any valid complaint system and under any coalition structure. Next, we show the equity equilibrium characterizes both the kernel, the Shapley value, and the generalized Nash Bargaining Solution of a cooperative game under specific complaint systems. Finally, we show how simplicial algorithms can be employed for computing any type of equity equilibrium and illustrate with an example from the Tennessee Valley Authority.

About the Speaker

Matt Van Essen is an economist with a research agenda that focuses on topics in public economics, game theory, and mechanism design. He is originally from Denver, Colorado and earned his PhD in economics from the University of Arizona in 2010. His work in public economics has focused on the incentive problems in the provision of public goods as well as methods to mitigate these problems. Recently, he has focused on problems of fair division in different economic contexts. His work has been published in economic journals such as the Journal of Economic Theory, Games and Economic Behavior, Economic Theory, Social Choice and Welfare, Mathematical Social Science, Economic Inquiry, and the Journal of Public Economic Theory.