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The Average Tree Solution for Multi-choice Forest Games

Béal, Sylvain and Lardon, Aymeric and Rémila, Eric and Solal, Philippe (2011): The Average Tree Solution for Multi-choice Forest Games.

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Abstract

In this article we study cooperative multi-choice games with limited cooperation possibilities, represented by an undirected forest on the player set. Players in the game can cooperate if they are connected in the forest. We introduce a new (single-valued) solution concept which is a generalization of the average tree solution defined and characterized by Herings et al. [2008] for TU-games played on a forest. Our solution is characterized by component efficiency, component fairness and independence on the greatest activity level. It belongs to the precore of a restricted multi-choice game whenever the underlying multi-choice game is superadditive and isotone. We also link our solution with the hierarchical outcomes (Demange, 2004) of some particular TU-games played on trees. Finally, we propose two possible economic applications of our average tree solution.

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