Convexity

Definition

Convexity refers to a property of a set where, for any two points within the set, the line segment connecting these points also lies entirely within the set. This characteristic plays a vital role in cooperative games as it helps to determine how the benefits from cooperation can be distributed among players while ensuring that everyone prefers their share compared to acting independently.

5 Must Know Facts For Your Next Test

1. In cooperative games, convexity of the characteristic function indicates that larger coalitions have at least as much worth as smaller ones, promoting group cooperation.
2. If the characteristic function is convex, it implies that there are benefits to forming larger coalitions rather than remaining independent.
3. Convexity is important for ensuring that payoffs can be distributed fairly among players in a way that reflects their contributions.
4. In terms of game theory, if a characteristic function is not convex, it can lead to instability as players may find better outcomes outside of the proposed coalitions.
5. The concept of convexity is essential when analyzing potential distributions of payoffs in cooperative settings, influencing strategies for cooperation.

Review Questions

• How does the concept of convexity relate to the formation of coalitions in cooperative games?
  • Convexity ensures that when players form larger coalitions, the total worth or benefit they receive is at least equal to what smaller coalitions would receive. This property encourages players to collaborate because they see a greater potential payoff by joining forces rather than acting independently. Essentially, convexity promotes cooperation by guaranteeing that players will not be worse off by joining a larger group.
• Discuss the implications of non-convex characteristic functions on coalition stability and player strategies in cooperative games.
  • Non-convex characteristic functions can lead to situations where forming larger coalitions does not guarantee higher payoffs compared to smaller groups. This unpredictability might make players hesitant to cooperate, as they may perceive better opportunities outside of proposed alliances. Consequently, it can create instability within the game, causing shifts in alliances and undermining cooperation since players might constantly seek more beneficial arrangements.
• Evaluate how convexity impacts the distribution of payoffs among players in cooperative games and its overall significance for achieving fairness.
  • Convexity significantly influences how payoffs are distributed by ensuring that larger coalitions provide increased value compared to smaller ones. This aspect is crucial for achieving fairness in allocation since it aligns incentives for collaboration among players. When payoffs can be fairly distributed based on contributions and cooperation results in better outcomes, it fosters a stable environment where all players feel their interests are protected and encourages long-term strategic partnerships.

Related terms

Cooperative Game: A game where players can benefit from forming coalitions and working together to achieve better outcomes than they could alone.

Characteristic Function: A function that assigns a value to each coalition of players in a cooperative game, representing the total worth or benefit that the coalition can achieve.

Core: The set of feasible allocations of payoffs to players that cannot be improved upon by any coalition, ensuring stability among participants.