Externalities and the nucleolus
Article [Version of Record]
Is part ofCahier de recherche ; #2017-04
Publisher(s)Université de Montréal. Département de sciences économiques.
In most economic applications, externalities prevail: the worth of a coalition depends on how the other players are organized. We show that there is a unique natural way of extending the nucleolus from (coalitional) games without externalities to games with externalities. This is in contrast to the Shapley value and the core for which many different extensions have been proposed.