Compare the shapley allocation with the nucleolus allocation

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Reference no: EM131445947

Question: A farmer (player 1) owns some land that he values at $100K. A speculator (player 2) feels that if she buys the land, she can subdivide it into lots and sell the lots for a total of $150K. A home developer (player 3) thinks that he can develop the land and build homes that he can sell. So the land to the developer is worth $160K.

(a) Find the characteristic function and the Shapley allocation.

(b) Compare the Shapley allocation with the nucleolus allocation.

Reference no: EM131445947

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