Cooperative Game Theory

Cooperative game theory assumes that groups of players, called coalitions, are the primary units of decision-making, and may enforce cooperative behavior. Consequently, cooperative games can be seen as a competition between coalitions of players, rather than between individual players. The basic assumption in cooperative game theory is that the grand coalition, that is the group consisting of all players, will form. One of the main research questions in cooperative game theory is how to allocate in some fair way the payoff of the grand coalition among the players. The answer to this question is related to a solution concept which, roughly speaking, is a vector that represents the allocation to each player. Different solution concepts based on different notions of fairness have been proposed in the cooperative game theory literature.

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