- Linear production game
"Linear Production Game" ("LP Game") is a N-person game in which the value of a coalition can be obtained by solving a
Linear Programming problem. It is widely used in the context of resource allocation and payoff distribution. Mathematically, there are "m" types of resources and "n" products can be produced out of them. Product "j" requires amount of the "kth" resource. The products can be sold at a given market price while the resources themselves can not. Each of the "N" players is given a vector of resources. The value of acoalition "S" is the maximum profit it can achieve with all the resources possessed by its members. It can be obtained by solving a correspondingLinear Programming problem as follows.The
core of the LP gameEvery LP game "v" is a
totally balanced game . So every subgame of "v" has a non-emptycore . Oneimputation can be computed by solving thedual problem of . Let be the optimal dual solution of . The payoff to player" i" is . It can be proved by theduality theorems that is in the core of "v".An important interpretation of the imputation is that under the current market, the value of each resource "j" is exactly , although it is not valued in themselves. So the payoff one player i should receive is the total value of the resources he possesses.
However, not all the
imputation s in the core can be obtained from the optimal dual solutions. There are a lot of discussions on this problem. One of the mostly widely used method is to consider ther-fold replication of the original problem. It can be shown that if an imputation "u" is in the core of the r-fold replicated game for all r, then "u" can be obtained from the optimal dual solution.References
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