Shapley value

Updated: Aug 20, 2021

A process for determining a fair allocation in a cooperative game. The Shapley value is computed by first determining what each player adds adding the difference between the pay-off to the coalition with the additiontd player and the pay-off to the coalition without. Second, the weighted sum of these pay-offs is computed with the weights being the probability that each coalition may form. The weighted sum is the Shapley value.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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