The manipulability of the Shapley-value (Q1104257): Difference between revisions

The Shapley value has been applied in economics to the fair division of a bundle of commodities among a group of agents. The resulting allocation called the value allocation requires the knowledge of the agents' utility functions. The author studies the consequences of a possible misrepresentation by the agents of their utility functions. Utilities are supposed to be transferable. First, all but one agent are considered as honest. Then, it is shown that the allocation obtained by the cheater is always preferred by him according to his true preferences. Second, all the agents attempt to manipulate. In this case, the author defines a manipulation quasi-game. At an equilibrium, the initial allocation is shown to be Pareto-efficient. Further, any equilibrium allocation is also an equilibrium of the analogously defined Walrasian manipulation game. Also, the true (constrained) Walrasian allocations are always equilibrium allocations. When the value allocation is slightly respecified, Walrasian allocations coincide with equilibrium allocations.