An Axiomatization of the Non-Transferable Utility Value.
STANFORD UNIV CA INST FOR MATHEMATICAL STUDIES IN THE SOCIAL SCIENCES
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The NTU Non-Transferable Utility Value is a solution concept for multiperson cooperative games in which utility is not transferable games without side payments. Introduced by Shapley in 1969, it generalizes his 1953 value for TU Transferable Utility games. Many economic contexts are more naturally modelled by NTU than by TU games and indeed, the NTU value has been applied with some success to a variety of economic and economic-political models. Two well-known applications are Nashs solutions 1950, 1953 for the bargaining problem and for two-person cooperative games, both of which are instances of the NTU value. In this paper, the author offers an axiomatization of the NTU value. Like any axiomatization, it should enable us to understand the concept better, and hence to focus discussion. One can now view the NTU value as defined by the axioms, with the treatment in Shapley 1969 serving as a formula or method of calculation. Thus the NTU value joins the ranks of the TU value and Nashs solution to the bargaining problem, each of which is defined by axioms, but usually calculated by a formula -- a formula whose intuitive significance is not, on the face of it, entirely clear.
- Theoretical Mathematics