Search arXivSearch

arXiv · 2310.20415

Coalitional Manipulations and Immunity of the Shapley Value

Abstract

We consider manipulations in the context of coalitional games, where a coalition aims to increase the total payoff of its members. An allocation rule is immune to coalitional manipulation if no coalition can benefit from internal reallocation of worth on the level of its subcoalitions (reallocation-proofness), and if no coalition benefits from a lower worth while all else remains the same (weak coalitional monotonicity). Replacing additivity in Shapley's original characterization by these requirements yields a new foundation of the Shapley value, i.e., it is the unique efficient and symmetric allocation rule that awards nothing to a null player and is immune to coalitional manipulations. We further find that for efficient allocation rules, reallocation-proofness is equivalent to constrained marginality, a weaker variant of Young's marginality axiom. Our second characterization improves upon Young's characterization by weakening the independence requirement intrinsic to marginality.

Explore related subjects

Keep this discovery

Explore connections, maps & timelines

BibTeXRIS

Christian Basteck, Frank Huettner. 2023-10-31. Coalitional Manipulations and Immunity of the Shapley Value. https://arxiv.org/abs/2310.20415

Cite the original work for its findings. Save a collection to share your selection of sources.

KEEP EXPLORING

Related papers

Log-concave functions and transformations thereof

I summarize Bagnoli and Bergstrom (2005)'s review on log-concave functions, make several corrections, and augment the discussion with further results that can be useful in establishing monotone hazard rates. I also provide an application to monopoly pricing, where log-concavity of the demand curve implies strict concavity of the revenue function in quantity.

econ.TH

Audit the Auditors: Commitment versus Professional Judgment

This paper provides a theoretical framework to evaluate the trade-off between the self-regulated peer review system and independent government inspection (PCAOB) in the auditing profession. We model the peer review system as a Judgment Regime, where a stakeholder utilizes professional expertise, captured as a private signal, to make ex-post decisions on verifying audit failures. In contrast, PCAOB inspection is modeled as a Commitment Regime, where the stakeholder lacks private information but can commit ex-ante to a predetermined level of verification. We find that the Judgment Regime benefits from a resource-allocation effect and a deterrence effect driven by informed verification, whereas the Commitment Regime deters audit failures through the first-mover advantage of ex-ante commitment. Our analysis demonstrates that the stakeholder prefers the peer review system if and only if the private signal is sufficiently informative. Furthermore, comparative statics reveal that higher verification costs or stronger audit incentives shift the stakeholder's preference toward PCAOB inspection.

econ.TH

Reputation, Disclosure, and the Scope of Entry

This paper studies how learning about an incumbent affects the scope of entry when competitive responses use resources shared across markets. An entrant chooses whether to launch in neither, one, or both of two markets. Entry into the second market reduces the incumbent's cost-reducing response in the first and can make one-market entry unattractive. The entrant learns about the incumbent's capability from a record of its response to an earlier rival. More frequent publication encourages a less capable incumbent to imitate a more capable one. An observed response then becomes less informative, and entry after that record expands. We compare publication of conduct with a public audit of capability. For an open set of parameters with uniform setup costs, full publication maximizes total surplus within the specified policy class when publication costs are low. Removing the interaction between response costs across markets reverses this choice, while preserving all early and singleton-market payoffs. A capability audit is dominated in both economies. Expected entry scope is constant across the considered policies within each technology, although productive investment and the allocation of entry change.

econ.TH