Bargaining Multiple Issues with Leximin Preferences

Global bargaining problems over a finite number of different issues, are formalized as cartesian products of classical bargaining problems. For maximin and leximin bargainers we characterize global bargaining solutions that are efficient and satisfy the requirement that bargaining separately or globally leads to equivalent outcomes. Global solutions in this class are constructed from the family of monotone path solutions for classical bargaining problems.Global bargaining, maximin preferences, leximin preferences

Inequity Aversion May Increase Inequity

Inequity aversion models have been used to explain equitable payoff divisions in bargaining games. I show that inequity aversion can actually increase the asymmetry of payoff division if unanimity is not required. This is due to the analogy between inequity aversion and risk aversion. Inequity aversion may also affect comparative statics: the advantage of being proposer can decrease as players become more impatient.Noncooperative Bargaining, Coalition Formation, Inequity Aversion

A Game Theory Approach for Conjunctive Use Optimization Model Based on Virtual Water Concept

In this study to allocate the agricultural and environmental water, considering virtual water concept, a multi-objective optimization model based on NSGA-II is developed. The objectives consist of equity maximization, agricultural benefit maximization for each region, maximization of green water utilization and finally minimization of environmental shortage. Then a cooperative game (Grand Coalition) model is presented by forming all possible coalitions. By the game model including Nucleolus, Proportional Nucleolus, Normal Nucleolus and Shapley methods, the benefit is reallocated based on all Pareto optimal solutions obtained from multi-objective optimization model. Then using two famous fallback bargaining methods, Unanimity and q-Approval, preferable alternative (solution) for each of the cooperative games is determined. Finally, based on the obtained benefit for each selected alternatives, the two most beneficial alternatives are chosen. The proposed methodology applied for water allocation of Minoo-Dasht, Azad-Shahr and Gonbad-Kavoos cities in Golestan province, Iran for a 3-year period as a case study. Also, eight crops including Wheat, Alfalfa, Barley, Bean, Rice, Corn, Soya, and Cotton are selected based on local experts’ recommendations. The models’ results indicated no significant difference between the grand coalition model and the multi-objective optimization model in terms of the average cultivation area (a relative change of 2.1%), while lower agricultural water allocation occurred for the grand coalition model (about 10.35 percent average) compared with the multi-objective optimization model. It is also observed that more agricultural benefit gained by the grand coalition model (32 percent average). Finally, it is found that Wheat and Corn hold the most rates of import and export, respectively, and Rice was the crop which has the least shortage of production to supply food demand

Nonlinear Interval Parameter Programming Combined with Cooperative Games: a Tool for Addressing Uncertainty in Water Allocation Using Water Diplomacy Framework

This paper shows the utility of a new interval cooperative game theory as an effective water diplomacy tool to resolve competing and conflicting needs of water users from different sectors including agriculture, domestic, industry and environment. Interval parameter programming is applied in combination with cooperative game theoretic concepts such as Shapley values and the Nucleolus to provide mutually beneficial solutions for water allocation problems under uncertainty. The allocation problem consists of two steps: water resources are initially allocated to water users based on the Nash bargaining model and the achieved nonlinear interval parameter model is solved by transforming it into a problem with a deterministic weighted objective function. Water amounts and net benefits are reallocated to achieve efficient water usage through net benefit transfers. The net benefit reallocation is done by the application of different cooperative game theoretical methods. Then, the optimization problem is solved by linear interval programming and by converting it into a problem with two deterministic objective functions. The suggested model is then applied to the Zarrinehrud sub-basin, within Urmia Lake basin in Northwestern Iran. Findings suggest that a reframing of the problem using cooperative strategies within the context of water diplomacy framework - creating flexibility in water allocation using mutual gains approach - provides better outcomes for all competing users of water

Spatial Dynamic Modeling and Urban Land Use Transformation:

Assessing the economic impacts of urban land use transformation has become complex and acrimonious. Although community planners are beginning to comprehend the economic trade-offs inherent in transforming the urban fringe, they find it increasingly difficult to analyze and assess the trade-offs expediently and in ways that can influence local decisionmaking. New and sophisticated spatial modeling techniques are now being applied to urban systems that can quickly assess the probable spatial outcomes of given communal policies. Applying an economic impact assessment to the probable spatial patterns can provide to planners the tools needed to quickly assess scenarios for policy formation that will ultimately help inform decision makers. This paper focuses on the theoretical underpinnings and practical application of an economic impact analysis submodel developed within the Land use Evolution and Impact Assessment Modeling (LEAM) environment. The conceptual framework of LEAM is described, followed by an application of the model to the assessment of the cost of urban sprawl in Kane County, Illinois. The results show the effectiveness of spatially explicit modeling from a theoretical and a practical point of view. The agent-based approach of spatial dynamic modeling with a high spatial resolution allows for discerning the macro-level implications of micro-level behaviors. These phenomena are highlighted in the economic submodel in the discussion of the implications of land use change decisions on individual and communal costs; low-density development patterns favoring individual behaviors at the expense of the broader community.

Negociación en ambiente de incertidumbre. Una solución conservadora

In this paper we address a general two-person bargaining problem under uncertainty. To this end, several states of nature or future scenarios are considered. Under the assumption that agents are risk averse, we propose a solution concept based on the distance to a utopian minimum outcome vector, which guarantees conservative levels of achievement for the agents. This conservative solution is obtained as the solution of a minimax programming problem. When some requirements on the bargaining set are assumed, an axiomatic characterization of the conservative solution is provided. An extension of the classic model of firm-union negotiation, which includes situations where uncertainty about the consequences of the agreements has to be taken into account, is analyzed in this framework.En este trabajo analizamos un problema de negociación bipersonal en ambiente de incertidumbre, para lo cual consideramos varios estados de la naturaleza o futuros escenarios posibles. Proponemos un concepto de solución bajo la hipótesis de que los jugadores son adversos al riesgo y negocian sobre aquellos resultados que minimizan la distancia entre las utilidades que obtienen en cada escenario y un vector de utilidades mínimas utópico. Esta solución conservadora se obtiene como la solución de un problema de programación minmax. Cuando el conjunto de negociación verifica determinadas propiedades, obtenemos una caracterización axiomática del concepto de solución propuesto. En este contexto, analizamos una extensión del modelo clásico de negociación empresa-sindicato en el que existe incertidumbre sobre las consecuencias de los posibles acuerdos alcanzables por los agentes

Shared value economics: an axiomatic approach

The concept of shared value was introduced by Porter and Kramer as a new conception of capitalism. Shared value describes the strategy of organizations that simultaneously enhance their competitiveness and the social conditions of related stakeholders such as employees, suppliers and the natural environment. The idea has generated strong interest, but also some controversy due to a lack of a precise definition, measurement techniques and difficulties to connect theory to practice. We overcome these drawbacks by proposing an economic framework based on three key aspects: coalition formation, sustainability and consistency, meaning that conclusions can be tested by means of logical deductions and empirical applications. The presence of multiple agents to create shared value and the optimization of both social and economic criteria in decision making represent the core of our quantitative definition of shared value. We also show how economic models can be characterized as shared value models by means of logical deductions. Summarizing, our proposal builds on the foundations of shared value to improve its understanding and to facilitate the suggestion of economic hypotheses, hence accommodating the concept of shared value within modern economic theory.Comment: 22 pages, 4 figure

Spatial dynamic modeling and urban land use transformation : an ecological simulation approach to assessing the costs of urban sprawl

Assessing the economic impacts of urban land use transformation has become complex and acrimonious. Although community planners are beginning to comprehend the economic trade-offs inherent in transforming the urban fringe, they find it increasingly difficult to analyze and assess the trade-offs expediently and in ways that can influence local decisionmaking. New and sophisticated spatial modeling techniques are now being applied to urban systems that can quickly assess the probable spatial outcomes of given communal policies. Applying an economic impact assessment to the probable spatial patterns can provide to planners the tools needed to quickly assess scenarios for policy formation that will ultimately help inform decision makers. This paper focuses on the theoretical underpinnings and practical application of an economic impact analysis submodel developed within the Land use Evolution and Impact Assessment Modeling (LEAM) environment. The conceptual framework of LEAM is described, followed by an application of the model to the assessment of the cost of urban sprawl in Kane County, Illinois. The results show the effectiveness of spatially explicit modeling from a theoretical and a practical point of view. The agent-based approach of spatial dynamic modeling with a high spatial resolution allows for discerning the macro-level implications of micro-level behaviors. These phenomena are highlighted in the economic submodel in the discussion of the implications of land use change decisions on individual and communal costs; low-density development patterns favoring individual behaviors at the expense of the broader community

Pollution responsibility allocation in supply networks: A game-theoretic approach and a case study

This study introduces a cooperative game theory approach aimed at addressing the problem of allocating pollution responsibility across partners collaborating in supply networks. The proposed framework includes three different allocation rules through which companies can share pollution responsibility across complex supply networks. A case study in the context of a supply network for the manufacturing of construction materials is illustrated for demonstrating the real-world applicability of the approach