On the externality free shapley-shubik index

We address the problem of extending the Shapley-Shubik index to the class of simple games with externalities introduced in Alonso-Meijide et al. (2017). On the one hand, we provide bounds for any efficient, symmetric, and monotonic power index. On the other hand, we characterize the restriction of the externality-free value of de Clippel and Serrano (2008) to the class of games under study by adapting well-known properties

The Shapley-Shubik Index in the Presence of Externalities

In this note we characterize the restriction of the externality-free value of de Clippel and Serrano (2008) to the class of simple games with externalities introduced in Alonso-Meijide et al. (2015

Power distribution in the Basque Parliament using games with externalities

In this paper we study the distribution of power in the Basque Parliament since the restoration of the Spanish democracy. The classic simple games do not fit with the particular voting rule that it is used to invest the president of the regional government. In order to model this voting mechanism we incorporate coalitional externalities to the game. We use the extensions of the most popular power indices to games with externalities that have been proposed in the most recent literature. Moreover, we propose a method to estimate the probability of a given coalition based on the ideological positions of its members in a two-dimensional political spectrum

Power Indices and Minimal Winning Coalitions in Simple Games with Externalities

We propose a generalization of simple games to sit uations with coalitional externalities. The main novelty of our generalization is a monotonicity property that we define for games in partition function form. This property allows us to properly speak about minimal winning embedded coalitions. We propose and characterize two power indices based on these kind of coalitions. We provide methods based on the multilinear extension of the game to compute the indices. Finally, the new indices are used to study the distribution of power in the current Parliament of Andalusia

Competitive Markets, Collective Decisions and Group Formation

We consider a general equilibrium model where groups operating in a competitive market environment can have several members and make efficient collective consumption decisions. Individuals have the option to leave the group and make it on their own or join another group. We study the effect of these outside options on group formation, group stability, equilibrium existence, and equilibrium efficiency.household behavior, household formation, collective decision making, general equilibrium

Stable Matchings for a Generalised Marriage Problem

We show that a simple generalisation of the Deferred Acceptance Procedure with men proposing due to Gale and Shapley (1962) yields outcomes for a generalised marriage problem, which are necessarily stable. We also show that any outcome of this procedure is Weakly Pareto Optimal for Men, i.e. there is no other outcome which all men prefer to an outcome of this procedure. In a final concluding section of this paper, we consider the problem of choosing a set of multi-party contracts, where each coalition of agents has a non-empty finite set of feasible contracts to choose from. We call such problems, generalised contract choice problems. The model we propose is a generalisation of the model due to Shapley and Scarf (1974) called the housing market. We are able to show with the help of a three agent example, that there exists a generalised contract choice problem, which does not admit any stable outcome.Stable outcomes, Matchings, pay-offs, Generalised marriage problem, Contract choice problem

A Parimutuel Market Microstructure for Contingent Claims

Parimutuel principles are widely used as an alternative to fixed odds gambling in which a bookmaker acts as a dealer by quoting fixed rates of return on specified wagers. A parimutuel game is conducted as a call auction in which odds are allowed to fluctuate during the betting period until the betting period is closed or the auction 'called'. The prices or odds of wagers are set based upon the relative amounts wagered on each risky outcome. In financial microstructure terms, trading under parimutuel principles is characterised by (1) call auction, non-continuous trading; (2) riskless funding of claim payouts using the amounts paid for all of the claims during the auction; (3) special equilibrium pricing conditions requiring the relative prices of contingent claims equal the relative aggregate amounts wagered on such claims; (4) endogenous determination of unique state prices; and (5) higher efficiency. Recently, a number of large investment banks have adopted a parimutuel mechanism for offering contingent claims on various economic indices, such as the US Nonfarm payroll report and Eurozone Harmonised inflation. Our paper shows how the market microstructure incorporating parimutuel principles for contingent claims which allows for notional transactions, limit orders, and bundling of claims across states is constructed. We prove the existence of a unique price equilibrium for such a market and suggest an algorithm for computing the equilibrium. We also suggest that for a broad class of contingent claims, that the parimutuel microstructure recently deployed offers many advantages over the dominant dealer and exchange continuous time mechanisms

A Coase Theorem Based on a New Concept of the Core

The core is reformulated to incorporate the externality typical in strategic form games. �Any coalition of players may deviate by trying to commit to a profile of actions different from a status quo. �The outsiders of the coalition may take a coordinated measure, incentive-feasibly for themselves, to preempt the coalition's commitment. �If a coalition succeeds in committing to its action profile, the outsiders' reactions constitute a core solution among themselves. �A core solution is robust against the deviations of coalitions which expect such preemptive and reactive responses from the other players. �In an externality problem where pollution is the dominant action, the core is nonempty. �In any two-player strategic form game, the core is also nonempty.core; equilibrium; cooperative game theory; coalition; externality; competing principals; Coase Theorem

Trade Sanctions, Financial Transfers and BRIC's Participation in Global Climate Change Negotiations

Countries can reduce global emissions by reducing own consumption since they are linked to the total value of consumption world wide. Two effects are at issue: a utility loss from forgone consumption and a utility gain from lowered temperature change. It is thus unclear whether own country emissions reductions are in the self interest; typically they are not for small countries, but may be for larger countries. Here are investigate the incentives for individual large population low wage rapidly growing countries in the BRIC group (Brazil, Russia, India, China) and the groups of countries as a sub-global coalition. We also assess what level of other countries’ trade measures linked to non participation is needed to induce compliance as an all or nothing discrete choice. We capture induced changes in the global trade equilibrium in our analysis, as well as participation linked to financial transfers. Our results suggest that only very high tariffs over a hundred percent by all other countries, or even higher tariffs by the OECD alone, could induce participation by BRIC countries, especially when the country is a net exporter. Equally, large financial transfers would be needed.trade sanctions, financial transfers, global emissions, climate change