co-operative games theory

(1940s)

A branch of game theory dealing with co-operative rather than simply competitive players.

Game theory attempts to study the interaction of individual decisions (given specific assumptions about decisions made under risk), the general environment and individual behavior patterns.

Co-operative games theory is used in the analysis of cartels and other forms of market collusion.

Also see: collusion theory, oligopoly theory, Allais paradox

Source:
J von Neumann and O Morgenstern, The Theory of Games and Economic Behavior (Princeton, N.J., 1944)


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