Solution

ID: past-exam-of-the-mathematics-course-of-the-university-of-cambridge/2010/iii/paper-35/5/solution

A coalitional game with transferable utility has a finite player set and a characteristic function of a coalitional game , normalized by . The value is the total payoff the coalition can secure and redistribute among its members.
An imputation is an efficient, individually rational payoff vector:
The core of a cooperative game consists of imputations satisfying every coalition constraint:
A coalition assigned less than its characteristic value can leave and make every member better off, by sharing the positive surplus. Conversely a coalition with no such surplus cannot improve every member's payoff simultaneously. This explains the stability represented by the core of a cooperative game.

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