Scandinavian Working Papers in Economics

Discussion Papers of Business and Economics,
University of Southern Denmark, Department of Business and Economics

No 5/2016: On a class of vertices of the core

Michel Grabisch () and Peter Sudhölter ()
Additional contact information
Michel Grabisch: Paris School of Economics, Postal: University of Paris I, 106-112, Bd de l'Hôpital, 75013 Paris, France
Peter Sudhölter: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark

Abstract: It is known that for supermodular TU-games, the vertices of the core are the marginal vectors, and this result remains true for games where the set of feasible coalitions is a distributive lattice. Such games are induced by a hierarchy (partial order) on players. We propose a larger class of vertices for games on distributive lattices, called min-max vertices, obtained by minimizing or maximizing in a given order the coordinates of a core element. We give a simple formula which does not need to solve an optimization problem to compute these vertices, valid for connected hierarchies and for the general case under some restrictions. We find under which conditions two different orders induce the same vertex for every game, and show that there exist balanced games whose core has vertices which are not min-max vertices if and only if n > 4.

Keywords: TU games; restricted cooperation; game with precedence constraints; core; vertex

JEL-codes: C71

26 pages, August 26, 2016

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