In this paper we define a bargaining solution for cooperative games with incomplete information. Our solution concept is inspired in Myerson's [Mechanism design by an informed principal , Econometrica. (1983), 51, 1767-1797] theory on the informed principal problem and the random dictatorship procedure. It has the essential feature of generalizing the Maschler-Owen consistent value for non-transferable utility games. Our main results are individual rationality, incentive (second best) efficiency and existence of our cooperative solution. To obtain these results we restrict our analysis to cooperative games with stochastically independent types, private values and orthogonal coalitions.
Random Dictatorship and the Value in Cooperative Games with Incomplete Information
salamanca lugo
2017-01-01
Abstract
In this paper we define a bargaining solution for cooperative games with incomplete information. Our solution concept is inspired in Myerson's [Mechanism design by an informed principal , Econometrica. (1983), 51, 1767-1797] theory on the informed principal problem and the random dictatorship procedure. It has the essential feature of generalizing the Maschler-Owen consistent value for non-transferable utility games. Our main results are individual rationality, incentive (second best) efficiency and existence of our cooperative solution. To obtain these results we restrict our analysis to cooperative games with stochastically independent types, private values and orthogonal coalitions.
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