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(d) Find the Shapley value. (e) Comparing the core and the Shapley value, which allocation does Hillary prefer? Question 5. [12 points] Investment Opportunities Larger
(d) Find the Shapley value. (e) Comparing the core and the Shapley value, which allocation does Hillary prefer? Question 5. [12 points] Investment Opportunities Larger amounts of money invested in certificates of deposit get a better rate of return. Beyonc Player 1), Taylor Swift (Player 2) and Ed Sheeran (Player 3) want to form an investment partner- ship to pool their money. Suppose Beyonc will invest $2,000,000, Taylor Swift will invest $1,200,000, and Ed Sheeran will invest $800,000. The rates of return are as follows: Invested amount Rate of return 0 1,000,000 1,000,001- 3,000,000 > 3,000,000 5% 6% (a) Define the characteristic function for this game. (b) Find the core of the game (c) Find the Shapley value of the game. (d) Is the Shapley allocation in the core? Why or why not
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