Term
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Definition
| Mathematical framework for modeling and analyzing conflict situations that involve economic agents with possibly diverging interests. |
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Term
| What is the focus of non-cooperative game theory? |
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Definition
| Individual strategic and competitive utility maximizing behavior of economic agents (players). |
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Term
| What is strategic analysis? |
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Definition
| Considering situations from the viewpoint of other players to reach on adequate private choice of action. |
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Term
| Why is strategic analysis needed in game theory? |
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Definition
| Because the utility of a certain agent in interactive situations will also be dependent on actions of other players. |
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Term
| What is the main focus of cooperative game theory? |
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Definition
| Analysing the negoation process within a group of players in establishing a contract on a joint plan of activities, including an allocation of the correspondingly generated revenues. |
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Term
| What is a transferable utility game? |
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Definition
| A game where players can transfer utility (cash) between each other without any costs. The units if this utility are valued equally by all others. |
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Term
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Definition
It is a finite set of players. A set of 3 players is written as:
N = {1, 2 ,3} |
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Term
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Definition
| It denotes the collection of all subsets of N. |
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Term
| How are the elements of 2^N called? |
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Definition
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Term
| What is the formal notation of a TU-game? |
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Definition
(N,v) where
v : 2^N -> IR with v(0) = 0 |
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Term
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Definition
| Set A is a subset of set B if it is contained inside B. This relationship is called inclusion or containment.
[image] |
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Term
| How is function v called and what does it denote? |
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Definition
| Characteristic function. For S is a subset of N, v(S) is called the worth or value of the coalition S. |
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Term
| How to write formally that N is divided into two disjoint groups L and R? |
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Definition
| N = L union R, L intersection R = 0 |
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Term
| Assume two disjoint groups. Members of group 1 have one left hand glove and members of groups 2 have 1 right hand glove. A single glove is worth nothing, but a pair is worth 10 euros. Describe this situation formally. |
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Definition
v(S) = 10 euros * min{|L intersection N|, |R intersection N|}
for all S element of 2^N |
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