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Chapter 53: Cooperative Game Theory and the Core
Cooperative Game Theory and the Core
The models of game theory studied so far fall under the classification of non-cooperative games. The key assumption in non-cooperative game theory is that no binding agreements can be written. The field of cooperative game theory departs from non-cooperative game theory in this important respect: It assumes that binding agreements can be struck. With this assumption, the field of cooperative game theory asks: What kinds of binding agreements would emerge from the interaction between rational parties who have common knowledge of the underlying strategic landscape?
The models of game theory studied so far fall under the classification of non-cooperative games. In games like the prisoners’ dilemma, we see the phenomenon of Nash equilibria, where ...