THE FORMATION OF GROUPS FOR COOPERATIVE DECISION MAKING UNDER UNCERTAINTY.
Abstract
In many situations involving interaction among parties, the individual welfare of each party can be improved by cooperation. This requires a cooperative decision, which specifies the course of action to be followed by each party, and a rule for sharing the total payoff resulting from that decision. In general, the total payoff will depend on the value of a random variable that is unknown at the time of the decision making. This study determines the conditions under which the parties are willing to delegate cooperative decision making to a group. In arriving at its optimal decision, this group does not take into account the division of the total payoff among the parties. Furthermore, the parties are willing to form this group independent of the set of alternative payoff functions. The results are based on the assumption of complete information; that is, each party knows his own and his opponents' utility functions, subjective probability distributions, available strategies, and payoff functions. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 10, 1968
- Accession Number
- AD0681033
Entities
People
- Jakob Rosing
Organizations
- Stanford University