Showing posts from June, 2018

Focus: Shapley value

Game theory is a fascinating topic codifying and quantifying all sorts of interactions between stakeholders in a game. The most popular setup is the prisoner's dilemma but there is much more to it. Today, we will cover the Shapley value as I recently stumbled across this original yet relatively unknown concept. Problem at stake : Example 1: In a salary negotiation, the employee showcases his skills and what it brings to the company. But how much are these skills worth ? Example 2 : In a Joint Venture, each founding company brings expertise. What’s a fair distribution of the ownership/shares ? Example 3 : 2 (or 3) TelCo companies want to build a fiber network that would benefit both. What’s a fair payment breakdown ? When you think about these problems, most of us would tend to answer them through guesses: “You should ask for X% raise because you deserve it” but there is actually a theory for it Let’s look at the theory behind. Solution : This is kn