Balanced Contributions in Networks and Games with Externalities
Fuente:
arXiv
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| Natura: | Preprint |
| Pubblicazione: |
2026
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| _version_ | 1866917410594881536 |
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| author | Huettner, Frank |
| author_facet | Huettner, Frank |
| contents | For networks with externalities, where each component's worth may depend on the full network structure, balanced contributions and fairness lead to distinct component-efficient allocation rules. We characterize the unique component-efficient allocation rule satisfying balanced contributions -- the BCE rule. Existence is the main challenge: balanced contributions must hold on every edge, but the construction uses only spanning-tree edges. A cycle-sum identity bridges this gap by reducing balanced contributions on non-tree edges to relations in proper subnetworks. The BCE rule coincides with the Myerson value for TU games and with its generalization by Jackson--Wolinsky for network games without externalities, it recovers the externality-free value on the complete network, and -- unlike the fairness-based FCE rule -- it does not reduce to a graph-free formula applied to the graph-restricted game. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2604_13794 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Balanced Contributions in Networks and Games with Externalities Huettner, Frank Theoretical Economics Combinatorics 91A12 For networks with externalities, where each component's worth may depend on the full network structure, balanced contributions and fairness lead to distinct component-efficient allocation rules. We characterize the unique component-efficient allocation rule satisfying balanced contributions -- the BCE rule. Existence is the main challenge: balanced contributions must hold on every edge, but the construction uses only spanning-tree edges. A cycle-sum identity bridges this gap by reducing balanced contributions on non-tree edges to relations in proper subnetworks. The BCE rule coincides with the Myerson value for TU games and with its generalization by Jackson--Wolinsky for network games without externalities, it recovers the externality-free value on the complete network, and -- unlike the fairness-based FCE rule -- it does not reduce to a graph-free formula applied to the graph-restricted game. |
| title | Balanced Contributions in Networks and Games with Externalities |
| topic | Theoretical Economics Combinatorics 91A12 |
| url | https://arxiv.org/abs/2604.13794 |