Bondareva–Shapley theorem

The Bondareva–Shapley theorem, in game theory, describes a necessary and sufficient condition for the non-emptiness of the core of a cooperative game in characteristic function form. Specifically, the game's core is non-empty if and only if the game is balanced. The Bondareva–Shapley theorem implies that market games and convex games have non-empty cores. The theorem was formulated independently by Olga Bondareva and Lloyd Shapley in the 1960s.

Theorem

Let the pair $\langle N,v\rangle$ be a cooperative game in characteristic function form, where $N$ is the set of players and where the value function $v:2^{N}\to \mathbb {R}$ is defined on $N$ 's power set (the set of all subsets of $N$ ).

The core of $\langle N,v\rangle$ is non-empty if and only if for every function $\alpha :2^{N}\setminus \{\emptyset \}\to [0,1]$ where

$\forall i\in N:\sum _{S\in 2^{N}:\;i\in S}\alpha (S)=1$
the following condition holds:

\sum _{S\in 2^{N}\setminus \{\emptyset \}}\alpha (S)v(S)\leq v(N).

References

Bondareva, Olga N. (1963). "Some applications of linear programming methods to the theory of cooperative games (In Russian)" (PDF). Problemy Kybernetiki. 10: 119–139.
Kannai, Y (1992), "The core and balancedness", in Aumann, Robert J.; Hart, Sergiu (eds.), Handbook of Game Theory with Economic Applications, Volume I., Amsterdam: Elsevier, pp. 355–395, ISBN 978-0-444-88098-7
Shapley, Lloyd S. (1967). "On balanced sets and cores". Naval Research Logistics Quarterly. 14 (4): 453–460. doi:10.1002/nav.3800140404. hdl:10338.dmlcz/135729.

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