On optimal partitions, individual values and cooperative games: Will a wiser agent always produce a higer value?

TL;DR

This paper explores how increasing an agent's wisdom in resource partitioning can paradoxically decrease its value, analyzing conditions for this phenomenon and the stability of cooperative arrangements.

Contribution

It introduces a novel analysis of optimal resource partitioning with wisdom-based costs and examines conditions under which an agent's value may decline when its wisdom increases.

Findings

Counter-intuitive decrease in agent value with increased wisdom

Necessary and sufficient conditions for value increase or decrease

Conditions for the existence of a stable core in the cooperative game

Abstract

We consider an optimal partition of resources (e.g. consumers) between several agents (e.g. experts), given utility functions ("wisdoms") for the agents and their capacities. This problem is a variant of optimal transport (Monge-Kantorovich) between two measure spaces where one of the measures is discrete (capacities) and the costs of transport are the wisdoms of the agents. We concentrate on the individual value for each agent under optimal partition and show that, counter-intuitively, this value may decrease if the agent's wisdom is increased. Sufficient and necessary conditions for increment of the individual values will be given, independently of the other agents. The sharpness of these conditions is also discussed. Motivated by the above we define a cooperative game based on optimal partition and investigate conditions for the existence of a core for this game, guaranteeing the stability of the grand coalition.