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Cooperative game theory and its application to natural, environmental, and water resource issues : 1. basic theory


  • Parrachino, Irene
  • Zara, Stefano
  • Patrone, Fioravante


Game theory provides useful insights into the way parties that share a scarce resource may plan their use of the resource under different situations. This review provides a brief and self-contained introduction to the theory of cooperative games. It can be used to get acquainted with the basics of cooperative games. Its goal is also to provide a basic introduction to this theory, in connection with a couple of surveys that analyze its use in the context of environmental problems and models. The main models (bargaining games, transfer utility, and non-transfer utility games) and issues and solutions are considered: bargaining solutions, single-value solutions like the Shapley value and the nucleolus, and multi-value solutions such as the core. The cooperative game theory (CGT) models that are reviewed in this paper favor solutions that include all possible players and ignore the strategic stages leading to coalition building. They focus on the possible results of the cooperation by answering questions such as: Which coalitions can be formed? And how can the coalitional gains be divided to secure a sustainable agreement? An important aspect associated with the solution concepts of CGT is the equitable and fair sharing of the cooperation gains.

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  • Parrachino, Irene & Zara, Stefano & Patrone, Fioravante, 2006. "Cooperative game theory and its application to natural, environmental, and water resource issues : 1. basic theory," Policy Research Working Paper Series 4072, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4072

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    1. repec:spr:waterr:v:32:y:2018:i:14:d:10.1007_s11269-018-2051-0 is not listed on IDEAS
    2. repec:spr:waterr:v:31:y:2017:i:13:d:10.1007_s11269-017-1746-y is not listed on IDEAS
    3. Osório, António (António Miguel), 2016. "A Sequential Allocation Problem: The Asymptotic Distribution of Resources," Working Papers 2072/266574, Universitat Rovira i Virgili, Department of Economics.
    4. Marco Rogna, 2016. "Cooperative Game Theory Applied To Ieas: A Comparison Of Solution Concepts," Journal of Economic Surveys, Wiley Blackwell, vol. 30(3), pages 649-678, July.
    5. Hurt, Wesley & Osório, António (António Miguel), 2014. "A Sequential Allocation Problem: The Asymptotic Distribution of Resources," Working Papers 2072/237596, Universitat Rovira i Virgili, Department of Economics.
    6. repec:eee:gamebe:v:108:y:2018:i:c:p:182-205 is not listed on IDEAS

    More about this item


    Environmental Economics&Policies; Economic Theory&Research; Livestock&Animal Husbandry; Education for the Knowledge Economy; Education for Development (superceded);

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