The Shapley Value is a solution concept in cooperative game theory that provides a fair distribution of payoffs among players who collaborate to achieve a common goal. It is based on the idea that each player's contribution to the total payoff should be taken into account when determining their reward. The value is calculated by considering all possible coalitions of players and assessing the marginal contribution of each player to these coalitions. Mathematically, the Shapley Value for player is given by:
where is the set of all players, is the value of coalition , and is the number of players in coalition . This formula ensures that players who contribute more to the collective success are appropriately compensated, fostering collaboration and stability within cooperative frameworks. The Shapley Value is widely used in various fields, including economics, political science, and resource allocation.
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