Discriminatory Von Neumann-Morgenstern Solutions

Abstract

**Please note that the full text is embargoed** ABSTRACT: The von Neumann-Morgenstern solution (vN-M solution) or stable set is arguably the most dynamic and flexible solution concept for cooperative games with side-payments. Perhaps the most striking phenomenon is that vN-M solutions often suggest intricate coalition formation processes and corresponding payoffs. Why this occurs is not well understood. On the other hand, vN-M solutions are difficult to find. This paper deals with the class of discriminatory vN-M solutions and presents results that give insights in the corresponding coalition formation process. A computationally effective procedure is presented to answer the decision problem whether or not a proposed set of imputations to a given game is a discriminatory vN-M solution.