A Compromise Stable Extension of Bankruptcy Games: Multipurpose Resource Allocation

Abstract

This paper considers situations characterized by a common-pool resource, which needs to be divided among agents. Each of the agents has some claim on this pool and an individual reward function for assigned resources. This paper analyzes not only the problem of max- imizing the total joint reward, but also the allocation of these rewards among the agents. Analyzing these situations a new class of transferable utility games is introduced, called multipurpose resource games. These games are based on the bankruptcy model, as intro- duced by O'Neill (1982). It is shown that every multipurpose resource game is compromise stable. Moreover, an explicit expression for the nucleolus of these games is provided.bankruptcy games;compromise stability;nucleolus