Dynamic Cooperative Games

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  • 1 January 2000
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      • Published in RePEc
Abstract
The simplest and most common interpretation of a coalitional form game is that it pertains to a single interaction among the players. However, many if not most cooperative endeavors occur more than once or even repeatedly over time. In this paper we begin a systematic study of dynamic cooperative games. We argue that new tools are necessary to capture several important features of a dynamic analysis that are not adequately represented within the conventional (static) framework. These include the immutability of the sequence of play, the intertemporal evaluation of payoffs, intertemporal trading and/or borrowing or saving, and history dependent games and/or solutions. Here, we focus on the case in which a given set of players play a finite sequence of exogenously specified TU-games. We extend the notion of a cooperative solution to the intertemporal setting, and we discuss intertemporal extensions of the core and the Shapley value. We also discuss the role of intertemporal trade and borrowing/saving. The paper concludes with a blueprint for future work.
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