Balanced externalities and the Shapley value

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We characterize the Shapley value using (together with standard conditions of efficiency and equal gains in two-player games) a condition of ‘undominated merge-externalities’. Similar to the well-known ‘balanced contributions’ characterization, our characterization corresponds intuitively to ‘threat points’ present in bargaining. It derives from the observation that all semivalues satisfy ‘balanced merge-externalities’. Our characterization is applicable to useful, narrow sub-classes of games (including monotonic simple games), and also extends naturally to encompass games in partition function form.
Original languageEnglish
Pages (from-to)81-92
Number of pages12
JournalGames and Economic Behavior
Early online date28 Mar 2018
Publication statusPublished - 28 Mar 2018


  • Shapley value
  • Balanced contributions
  • Merge-externalities
  • Semivalues
  • Coalitional bargaining

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