EGALITARIAN SOLUTION FOR GAMES WITH DISCRETE SIDE PAYMENT

Abstract

In this paper, we study the egalitarian solution for games with discrete side payment, where the characteristic function is integer-valued and payoffs of players are integral vectors. The egalitarian solution, introduced by Dutta and Ray in 1989, is a solution concept for transferable utility cooperative games in characteristic form, which combines commitment for egalitarianism and promotion of indivisual interests in a consistent manner. We first point out that the nice properties of the egalitarian solution (in the continuous case) do not extend to games with discrete side payment. Then we show that the Lorenz stable set, which may be regarded a variant of the egalitarian solution, has nice properties such as the Davis and Maschler reduced game property and the converse reduced game property. For the proofs we utilize recent results in discrete convex analysis on decreasing minimization on an M-convex set investigated by Frank and Murota.