Cooperation in an inter-temporal framework under nontransferable utility/payoffs (NTU) presents a highly challenging and extremely intriguing task to game theorists. This chapter provides a coherent analysis on NTU cooperative dynamic games. The formulations of NTU cooperative dynamic games in continuous time and in discrete time are provided. The issues of individual rationality, Pareto optimality, and an individual player's payoff under cooperation are presented. Monitoring and threat strategies preventing the breakup of the cooperative scheme are presented. Maintaining the agreed-upon optimality principle in effect throughout the game horizon plays an important role in the sustainability of cooperative schemes. The notion of time (subgame optimal trajectory) consistency in NTU differential games is expounded. Subgame consistent solutions in NTU cooperative differential games and subgame consistent solutions via variable payoff weights in NTU cooperative dynamic games are provided.

Original languageEnglish
Title of host publicationHandbook of Dynamic Game Theory
PublisherSpringer Nature
Pages633-670
Number of pages38
ISBN (Electronic)9783319443744
ISBN (Print)9783319443737
DOIs
StatePublished - 12 Aug 2018

    Scopus subject areas

  • Mathematics(all)
  • Economics, Econometrics and Finance(all)
  • Business, Management and Accounting(all)

    Research areas

  • Cooperative games, Differential games, Dynamic games, Group optimality, Individual rationality, Nontransferable utility, Optimality principle, Subgame consistency, Time consistency, Variable weights

ID: 40031741