Game Theory in Economics
Chapter 6, Characteristic Function, Core, and Stable Set
ResearchPublished 1973
The sixth chapter of a manuscript dealing with the applications of game theory to economic analysis, this study develops the notion of "characteristic function," a way of expressing very concisely the capabilities of each coalition in a cooperative game. Several special classes of games are then identified and discussed briefly: symmetric games, measure games, simple (voting) games, and "Edgeworth" and "Bohm-Bawerk" market games. Two important solution concepts are then introduced: the core and the stable set. Their heuristic interpretations are discussed and illustrated by simple examples. A final section introduces the general notion of a market game, and the closely related technical concept of balanced families of sets. A descriptive bibliography, containing more than 100 articles and books dealing with stable sets, is included as an appendix. (See also R-904/1, R-904/2, R-904/3.)
Document Details
- Copyright: RAND Corporation
- Availability: Web Only
- Year: 1973
- Pages: 104
- Document Number: R-904/6-NSF
Citation
RAND Style Manual
Shapley, Lloyd S. and Martin Shubik, Game Theory in Economics: Chapter 6, Characteristic Function, Core, and Stable Set, RAND Corporation, R-904/6-NSF, 1973. As of September 12, 2026: https://www.rand.org/pubs/reports/R0904z6.html
Chicago Manual of Style
Shapley, Lloyd S. and Martin Shubik, Game Theory in Economics: Chapter 6, Characteristic Function, Core, and Stable Set. Santa Monica, CA: RAND Corporation, 1973. https://www.rand.org/pubs/reports/R0904z6.html.
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