Distinguish a co-operative equilibrium from a non-cooperative
Answers
Answer:
Explanation:
I think a key difference is that in cooperative game theory, players can make binding agreements before playing the game, e.g. how to share pay-offs. In non-cooperative game theory, on the other hand, agreements are not binding. This translates to individual players being the cornerstone of NCGT, while CGT considers coalitions of players. Further along the line, equilibria are different, as the concept of a Nash equilibrium (no single agent can gain by unilaterally deviating) is not a very strong solution concept if a group of agents is able to gain by jointly changing their strategies. This last bit is, of course, only relevant if they can all agree on their strategies beforehand.
Answer:
Cooperative Game is a game in which players negotiate their contracts so that they can make joint strategies. Generally these type of games are played between buyers and sellers.
Firms buying raw material or buying a service can negotiate for price settlement. Eg. If as a firm maker , I am changing some parts of all the machines.
Noncooperative Game is a game in which there is no form of negotiation and binding contracts.eg while setting up a price of its product, a firm will take into account the other competitive firm’s behavior. Beause if it will keep its prices high, then no one is going to buy its product because of high prices. So, it keeps similar prices.