The implicit assumption in a cooperative game is that players can form coalitions and make binding agreements on how to distribute the proceeds of these coalitions. A cooperative game is more abstract than a noncooperative game in the sense that strategies are not explicitly modelled: rather, the game describes what each possible coalition can earn by cooperation. In a cooperative game with transferable utility it is assumed that the earnings of a coalition can be expressed by one number. One may think of this number as an amount of money, which can be distributed among the players in any conceivable way – including negative payments – if the coalition is actually formed. More generally, it is an amount of utility and the implicit assumption is that it makes sense to transfer this utility among the players – for instance, due to the presence of a medium like money, assuming that individual utilities can be expressed in monetary terms.
This chapter presents a first acquaintance with the theory of cooperative games with transferable utility.1 A few important solution concepts — the core, the Shapley value, and the nucleolus – are briefly discussed in Sects. 9.2–9.4. We start with examples and preliminaries in Sect. 9.1.
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© 2008 Springer-Verlag Berlin Heidelberg
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(2008). Cooperative Games with Transferable Utility. In: Game Theory. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-69291-1_9
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