A team formation method based on a Markov chains games approach

Abstract

This article presents a method for estimating team formation based on a Markov chains games approach. The proposed approach represents the coalition structure using the Pareto front and naturally solves two fundamental problems in team formation: the coalition value computation and the payoff distribution. Central to this endeavor is the problem of finding the strong Nash equilibrium for which we employ the Newton optimization method. We use the Tikhonov regularization for ensuring the existence of a unique strong Nash equilibrium. The visualization technique plays a key role in helping decision-makers for team formation. An application example analyzes the optimal bundling strategies for a multiservice monopolist bank.