A General Framework for Cooperation Under Uncertainty

Abstract

In this paper, we introduce a general framework for situations with decision making under uncertainty and cooperation possibilities. This framework is based upon a two stage stochastic programming approach. We show that under relatively mild assumptions the cooperative games associated with these situations are totally balanced and, hence, have non-empty cores. Finally, we consider several example situations, which can be studied using this general framework.

Keywords: Two-stage stochastic programming, cooperative game theory, core

JEL Classification: C71