A novel game theoretic method on fair economic resource allocation with multiple Criteria

ABSTRACT

The present study is concerned with fair allocation of a resource to sectors to achieve the best accomplishments based on some criteria divided into merits and demerits of the sectors. There is a method similar to the idea of $\tau$-value in cooperative games with a selfish-modest approach that allows the sectors to selfishly and modestly choose their shares. In order to improve this method, another method using the Shapley value approach is proposed in this study that allows the sectors in different orders to selfishly or modestly choose their shares. These two methods are applied to invest among economic sectors in Iran. To compare the methods, the distance of their solutions to the Pareto frontier of the multi-objective problem is measured while considering the allocation fairness. It was concluded that the solution of the proposed method is greatly close to the Pareto frontier.

KEYWORDS:

• Resource allocation
• game theory
• multiple criteria analysis
• data envelopment analysis

Disclosure statement

No potential conflict of interest was reported by the author(s).