Marginal contributions and externalities in the value

For games in partition function form, we explore the implications of distinguishing between the concepts of intrinsic marginal contributions and externalities. If one requires efficiency for the grand coalition, we provide several results concerning extensions of the Shapley value. Using the axioms of efficiency, anonymity, marginality and monotonicity, we provide upper and lower bounds to players' payoffs when affected by external effects, and a characterization of an ''externality-free'' value. If the grand coalition does not form, we characterize a payoff configuration on the basis of the principle of balanced contributions. We also analyze a game of coalition formation that yields sharp prediction

Steady Marginality: A Uniform Approach to Shapley Value for Games with Externalities

The Shapley value is one of the most important solution concepts in cooperative game theory. In coalitional games without externalities, it allows to compute a unique payoff division that meets certain desirable fairness axioms. However, in many realistic applications where externalities are present, Shapley's axioms fail to indicate such a unique division. Consequently, there are many extensions of Shapley value to the environment with externalities proposed in the literature built upon additional axioms. Two important such extensions are "externality-free" value by Pham Do and Norde and value that "absorbed all externalities" by McQuillin. They are good reference points in a space of potential payoff divisions for coalitional games with externalities as they limit the space at two opposite extremes. In a recent, important publication, De Clippel and Serrano presented a marginality-based axiomatization of the value by Pham Do Norde. In this paper, we propose a dual approach to marginality which allows us to derive the value of McQuillin. Thus, we close the picture outlined by De Clippel and Serrano