Assume that the characteristic function of a coalition between three individuals

Question

Assume that the characteristic function of a coalition between three individuals named 1,2, and 3 is V(1,2,3) = $60; while V(1) = $20, V(2) = $16, and V(3) = $10, where V(i) is the value created by individual i. Which of the following allocations will lie within the core?

a. Payoffs to individuals 1,2, and 3 are $28, $15, and $17 respectively. b. Payoffs to individuals 1,2, and 3 are $30, $18, and $12 respectively. c. Payoffs to individuals 1,2, and 3 are $19, $35, and $6 respectively. d. Payoffs to individuals 1,2, and 3 are $32, $20, and $8 respectively.

Explanation / Answer

c. Payoffs to individuals 1,2, and 3 are $19, $35, and $6 respectively

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