Agreeing to Cooperate: Cooperative Game Theory and Solution Concepts
MPhil Microeconomics III: Game Theory
DAVID P. MYATT
DEPARTMENT OF ECONOMICS, UNIVERSITY OF OXFORD
CONTENTS
1. Cooperative Game Theory 2
2. Coalitional Games with Transferable Payoffs 3
3. Payoff Profiles and the Core 4
4. Example: Treasure Hunting 5
5. Application: Intra-Firm Bargaining 6
6. The Core of the Firm 7
7. A Production Example 8
8. Marginal Contributions and the Shapley Value 9
9. Expected Marginal Contributions 10
10. Application: The Shapley Value and a Worker 11
11. The Shapley Value for a Worker: The Easy Way 12
12. Application: The Shapley Value and the Firm 13
13. The Shapley Value for a Firm: The Easy Way 14
14. Justifying the Shapley Value 15
15. Behaviour and Scope of the Firm 16
16. The Over-Hiring of Labour 17
17. Investment Incentives and Frontload Factors 18
18. Economies of Scope and the Effect of Synergies 19