Suppose that the seller of an object (which is worthless to the seller) has two potential buyers who are willing to pay $100 or $130, respectively.
(a) Find the characteristic function and then the core and the Shapley value. Show that the Shapley value is not in the core.
(b) Show that the Shapley value is individually and group rational
Suppose that the seller of an object (which is worthless to the seller) has two potential buyers who are willing to pay $100 or $130, respectively.