Valuation of Games and Other Discrete Production Processes by Competitive Bidding

Young, H.P. (1978). Valuation of Games and Other Discrete Production Processes by Competitive Bidding. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-78-057

Preview

Text WP-78-057.pdf Download (663kB) | Preview

Abstract

The values of the players in an n-person cooperative game are analyzed by considering a simple auction model in which outside "entrepreneurs" bid to acquire control of the players. This bidding procedure always has a Nash equilibrium in pure strategies, thus yielding a concept of "market values" for the players. This class of values is easy to characterize and contains the core of the game. The model applies to various valuation problems (such as estate auctions, the setting of wage structures for laborers, or the valuation of divisions of a corporation) in which indivisible factors are present and there may be increasing returns to scale.

Actions (login required)

View Item