Cover: Game Theory in Economics

Game Theory in Economics

Chapter 6, Characteristic Function, Core, and Stable Set

Published 1973

by Lloyd S. Shapley, Martin Shubik


Download eBook for Free

FormatFile SizeNotes
PDF file 3.1 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.


Purchase Print Copy

 Format Price
Add to Cart Paperback104 pages $25.00

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.)

This report is part of the RAND report series. The report was a product of RAND from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.