Values for two-stage games: Another view of the Shapley axioms (Q914565)

The paper introduces a new type of game-model, the so-called two-stage games. The framework of two-stage games is meant to reflect the setup where the formation of a coalition is only a first stage, leading to a prespecified cooperative game to be played by the coalition's members at the second stage. Formally, let N be a finite player set, \(2^ N\) its power-set consisting of coalitions, and let \(G=\{v|\) v: 2\({}^ N\to {\mathbb{R}}\), \(v(\emptyset)=0\}\) be the familiar class of cooperative games on N in characteristic function form (the one-stage games). Further, for all \(T\subset N\) the class of games with carrier in T is given by \[ G^ T=\{v\in G| \quad v(S)=v(S\cap T)\text{ for all } S\subset N\}. \] Now the class of two-stage games on N is defined by \[ D=\{w| \quad w: 2^ N\to G,\quad w(T)\in G^ T\text{ for all } T\subset N\}. \] In the new framework of two-stage games, the authors present a list of five axioms that are precise and immediate equivalents of axioms that characterize the well-known Shapley value for the conventional (one- stage) games. The five axioms involved are linearity, symmetry, monotonicity, dummy player axiom and efficiency. A value on D is defined as a function \(\psi: D\to {\mathbb{R}}^ N\) satisfying the five axioms involved for two-stage games, whereas a semivalue needs not obey the efficiency axiom. The main result states the existence of (non-unique) semivalues and values for two-stage games. In fact, the two classes of all semivalues and values for two-stage games are characterized. Moreover, it is shown that the class of all values on D is a polytope of dimension \(\left( \begin{matrix} n\\ 2\end{matrix} \right)\) with \(2^{n-1}\) extreme points, where n is the number of players. Finally, it is indicated how the two-stage game-model can be naturally generalized to apply for multistage games. Some criticism of the authors on the performance of values on D is included by considering the semivalues for two-stage majority games (which extend the familiar one-stage majority games).