An induced subgraph game is a transferable utility game represented by a weighted undirected graph with one vertex per player; a coalition's value is the sum of the edge weights in its induced subgraph. With no self-loops,
where each unordered pair is counted once and an absent edge has weight zero. Weights may have either sign. In an induced subgraph game with self-loops, write the loop weight at as and add , counting each loop once. In particular, when loops are allowed and is zero otherwise.[ref]
A loop-free induced subgraph game is a convex cooperative game if and only if every edge weight is nonnegative. Necessity follows by applying the supermodular inequality to and . Since both singleton values and the empty value are zero,
Conversely, direct cancellation of common edge contributions gives, for any coalitions ,
Every summand is nonnegative, proving that is a supermodular set function and hence convexity. Equivalently, a player's marginal contribution to is , which cannot decrease as grows. This establishes the convexity criterion for an induced subgraph game directly.[ref]