Both firms A and H have decided to collaborate with another company, Firm W, to work together on a project. All firms have participated in similar projects before. Table 2 below shows the profits made by the firms in the different projects they have been involved, the table also shows the profits they will make if the three collaborate

Table2. Profits made by the different coalitions

Coalition	Profits made by the coalition
{A}	7
{H}	6
{W}	9
{A,H}	15
{A,W}	12
{H,A}	15
{H,W}	13
{W,A}	12
{W,H}	13
{A,H,W}	29

1. Argue why the three firms should collaborate in the project considering the profits the different coalitions have produced or will produce. Additionally, propose the Shapley value as a good alternative to split the profits produced by A, H and W. Evaluate what are the properties of the Shapley value to support your proposal. Include the appropriate calculations in your answer using the table below, and use economic intuition, theoretical results and concepts in your answer (25 marks)

S	Coalition's worth	A's marginal contribution	H's marginal contribution	W's marginal contribution
{A}
{H}
{W}
{A,H}
{A,W}
{H,A}
{H,W}
{W,A}
{W,H}
{A,H,W}
{A,W,H}
{H,A,W}
{H,W,A}
{W,A,H}
{W,H,A}
Shapley Value