Equitable Distribution in a Three Players Problem

Abstract

Abstract Jazz band is a 3 player superadditive game in characteristic function form. Three players have to divide the payoff they can get, while being in a grand coalition, provided their individual and duo coalitions payoffs are known. Assumptions of individual and collective rationality lead to the notion of the core of the game. We discuss offers that cannot readily be refused [OCRR] as the solutions of the game in case of an empty core, when duo coalitions are the best options but only for two out of three players. The experiment shows that even in case of an empty core the most probable results are three-way coalitions and the share of the weakest player usually exceeds his OCRR. The Shapley value is introduced and its fairness is discussed as it lies at the side of the core while, on the other hand, the nucleolus lies exactly at the center of the core. We conclude that, in spite of that, the Shapley value is the best candidate for a fair sharing solution of the jazz band game and other similar games as, opposite to the other values, it is dependent both on individual and duo coalitions payoffs.