The Shapley Value is a solution concept in cooperative game theory that assigns a unique distribution of a total surplus generated by a coalition of players. It is based on the idea of fairly allocating the gains from cooperation among all participants, taking into account their individual contributions to the overall outcome. The Shapley Value is calculated by considering all possible permutations of players and determining the marginal contribution of each player as they join the coalition. Formally, for a player , the Shapley Value can be expressed as:
where is the set of all players, is a subset of players not including , and represents the value generated by the coalition . The Shapley Value ensures that players who contribute more to the success of the coalition receive a larger share of the total payoff, promoting fairness and incentivizing cooperation among participants.
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