Topic

# Transferable utility

About: Transferable utility is a research topic. Over the lifetime, 1107 publications have been published within this topic receiving 23194 citations.

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TL;DR: In this article, the authors studied the problem of maximizing the expected utility of terminal wealth in the framework of a general incomplete semimartingale model of a financial market and showed that the necessary and sufficient condition on a utility function for the validity of several key assertions of the theory to hold true is the requirement that the asymptotic elasticity of the utility function is strictly less then one.

Abstract: The paper studies the problem of maximizing the expected utility of terminal wealth in the framework of a general incomplete semimartingale model of a financial market. We show that the necessary and sufficient condition on a utility function for the validity of several key assertions of the theory to hold true is the requirement that the asymptotic elasticity of the utility function is strictly less then one. (author's abstract)

1,071 citations

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01 Oct 1977

TL;DR: In this article, a new approach to game theory and to the analysis of social behavior has been proposed, based on rational-choice models of social behaviour under certainty, risk, and uncertainty.

Abstract: Part I. Preliminaries: 1. Bargaining-equilibrium analysis: a new approach to game theory and to the analysis of social behavior 2. Rational-choice models of social behavior 3. Rational behavior under certainty, risk, and uncertainty 4. Morality and social welfare A constructive approach Part II. General principles: 5. Some basic concepts of game theory 6. Rationality postulates for game situations 7. The four basic problems facing the players of a game Part III. Solutions for specific classes of games: 8. Two-person simple bargaining games: the Nash solution 9. General two-person cooperative games 10. n-Person simple bargaining games 11. n-Person cooperative games with transferable utility: the modified Shapley value 12. n-person cooperative games: the general case 13. n-Person cooperative games: discriminatory solutions 14. Noncooperative and almost-noncooperative games.

956 citations

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TL;DR: In this article, a real-valued function P is defined on the space of cooperative games with transferable utility, satisfying the following condition: in every game, the marginal contributions of all players (according to P) are efficient (i.e., add up to the worth of the grand coalition).

Abstract: Let P be a real-valued function defined on the space of cooperative games with transferable utility, satisfying the following condition: In every game, the marginal contributions of all players (according to P) are efficient (i.e., add up to the worth of the grand coalition). It is proved that there exists just one such function P--called the potential--and moreover that the resulting payoff vector coincides with the Shapley value. The potential approach yields other characterizations for the value; in particular, in terms of a new internal consistency property. Further results deal with weighted values and with the nontransferable utility case. Copyright 1989 by The Econometric Society.

724 citations

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TL;DR: In this article, the authors show that the Rotten Kid theorem is not true without assuming transferable utility, and they find a simple condition on utility functions that is necessary and sufficient for there to be the kind of transferable utilities needed for a Rotten-Kid theorem.

Abstract: Gary Becker's "Rotten Kid theorem" asserts that if all family members receive gifts of money income from a benevolent household member, then even if the household head does not precommit to an incentive plan for family members, it will be in the interest of selfish family members to maximize total family income. I show by examples that the Rotten Kid theorem is not true without assuming transferable utility. I find a simple condition on utility functions that is necessary and sufficient for there to be the kind of transferable utility needed for a Rotten Kid theorem. While restrictive, these conditions still allow one to apply the strong conclusions of the Rotten Kid theorem in an interesting class of examples.

478 citations

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TL;DR: In this article, nonwmmetric Shapley values for coalitional form games with transferable utility were studied and axiomatically it is shown that two families of solutions of this type are possible.

Abstract: Nonwmmetric Shapley values for coalitional form games with transferable utility are studied. The nonsymmetries are modeled through nonsymmetric weight systems defined on the players of the games. It is shown axiomatically that two families of solutions of this type are possible. These families are strongly related to each other through the duality relationship on games. While the first family lends itself to applications of nonsymmetric revenue sharing problems the second family is suitable for applications of cost allocation problems. The intersection of these two families consists essentially of the symmetric Shapley value. These families are also char- acterized by a prObabilistic arrival time to the game approach. It is also demonstrated that lack of symmetries may arise naturally when players in a game represent nonequal size constituencies.

389 citations