1. Introduction
Cooperative game theory and graph theory are closely related areas, as both study relationships among independent agents (players-nodes). There are many ways to approach game theory via graph theory. The goal of this article is to introduce a new idea about the concept of coalition defined on graphs.
In the 1950s, Shapley [1] introduced the well-known Shapley value, one of the most famous tools in the study of cooperative n-person games. Later, Myerson [2] used ideas from graph theory to provide a communication structure to the coalitions under study. Myerson’s idea is to define a restricted game that assigns to each coalition the sum of the payments achievable by the connected components of the coalition. Two players are related if and only if both want to collaborate in t game. Owen [3] studied ways to define payoff values for situations like the one described by Myerson.
In previous works, graphs were considered where players are the nodes of the graph. Later, the idea has been extended to games where edges also participate in the game. Alarcón et al. [4] extend Myerson’s ideas to these types of situations. Games defined on networks are a very active part of game theory research; Caulier [5] provides a good compilation of known results and applications.
With the vision proposed by Myerson-Alarcón, a game defined on the nodes of the graph is considered, and then it is extended to the graph itself. What we aim to do now is to directly define a game on the components of the graph. We want to define a function that takes cooperative sub-structures and assigns their gain. One of the first problems encountered when trying to define a game in this context is the number of subgraphs that need to be studied. A solution to this problem is, instead of working with all possible subgraphs, to work with irreducible blocks of subgraphs and with classes of these. We thus define a partition of our graph of interest and generate coalitions from unions of these blocks. This way, we obtain a significant reduction in the number of coalitions that need to be studied.
In Section 2 of the article, we detail the process of partitioning graphs into blocks. In Section 3, we develop the theory of games defined on graphs, obtain a quasi-linear decomposition of the game in terms of the blocks, and then define a Shapley-type value for games of this style. The last section is dedicated to an application example that illustrates the advantages of working through this method.
2. Graphs
2.1. Definitions
Suppose we have n independent players. A natural way to model the situation of interest is by using graphs. In this section, we will first present the elementary definitions of graph theory, establish the notation, and introduce the concept of graph partition and domains of unique decomposition.
Definition 2.1 (Graph) Given a set
, a graph with nodes in
is a pair
, where A is a set containing pairs
such that
The nodes N can be interpreted as the set of players, and A as the connections along with their intermediaries. Given
, we define
, where
That is,
is the graph where all nodes in V are connected. Furthermore,
is the graph where all players decide to cooperate with each other. Now, we would like to consider the set of all possible graphs with nodes in the player set N.
Definition 2.2. Given a set of nodes N, we define
This is the set of all possible graphs that have nodes in N. Given a specific graph
, we define
where
denotes the set of subgraphs contained in g. It is clear that
, as
is the complete graph, and every graph with nodes in N is contained in it.
Up to this point, we have defined the notion of a Cooperation Structure among the players. We will refer to each graph
as a coalition of players in N. We acknowledge that the intermediaries on the edges are also players; however, they act differently from the rest of the players. Their actions depend on the participation of players in N. In other words, the edge
can only participate in the game (and, therefore, in the gain) if players
decide to collaborate.
Remark 2.1. In practice, attempting to work with all possible subgraphs of a given graph proves to be very complicated. For instance, the number of subgraphs in
where
is given by
On the other hand, many of these graphs may not provide relevant information for our purposes. One of the goals of this conceptualization is to construct graphs in a more efficient manner and to focus on graphs that are of interest.
2.2. Graph Decomposition
Given a fixed graph
, determined by the cooperation structure, with
and
. From now on, we will consider g as the maximal graph with respect to the cooperation arrangement among players. We have defined an operation between the subgraphs of g, the union, which allows us to give an algebraic structure to the space of graphs. Formally, let
be the set of graphs of g, that is
We define the union of graphs as
where if
, then
We have that
has the structure of an abelian semigroup (the union is associative and commutative). Furthermore, if we consider the empty subgraph
, then
is a monoid.
Under what conditions is it possible that, given a certain subset of subgraphs
, we can uniquely decompose every graph
in terms of the elements of
?
The above is, given a subset
that is closed under unions, we would like to obtain a subset of subgraphs
such that for every
, there exists a unique subset
such that
The above construction allows us to have a notion of decomposition of our graphs of interest in terms of certain minimal irreducible elements. In this context, we will think of
as the minimal coalitions of players that interest us and M as the coalitions of interest (we will call them measurable coalitions).
Definition 2.3 (Generating Sets) Let
be a subset of measurable graphs. We will say that
generates M if for every
, there exists a subset
such that
We will say that
generates M uniquely if for every
, the subset
that generates l is unique. We call the elements of S the decomposition of l. We call the pair
domain of unique decomposition. Given
set of graphs, we define the set generated by
as
Example 2.1 (Edge Domain) Let
be the subset of graphs without isolated vertices (a vertex is isolated if there is no edge connecting it to another vertex). Let
be the set of edges in g, that is,
The elements of
are subgraphs that contain only two nodes and the edge that connects them. We have that every element
can be written as the union of the edges that compose it, i.e.,
The decomposition is unique because if
are two distinct decompositions of l, without loss of generality, if
but
, then
Then
is a domain of unique decomposition.
The purpose of the above construction is to provide a broader view of the concept of a game. We want to restrict our games to sets of coalitions that are of interest (measurable), which form a subset M. Moreover, this allows us to discuss on the existence of minimal coalitions that decompose our measurable coalitions and do so uniquely.
Remark 2.2. If
is a domain of unique decomposition, then M corresponds bijectively to
, where the element
is associated with
. In this way, we can work with subsets of subgraphs instead of considering all subgraphs as such (there are a total of
). This represents a computational advantage regarding the number of subgraphs presented in remark 2.1.
3. Games Defined on Graphs
3.1. Game Defined on a Unique Decomposition Domain
Formally, given a domain of unique decomposition
, an
-characteristic function game will be any function
where
is interpreted as the gain obtained by the subgraph
.
Example 3.1 (Unanimity Games) An elementary example is what we will henceforth refer to as unanimity functions (or games). Let
, and define the unanimity game as
Let
be the set of
-characteristic function games. We have that
is an
-vector space with pointwise addition and scalar multiplication of functions. Moreover,
. It can also be shown that the set of unanimity games
forms a basis for
. Thus, every game
can be uniquely expressed as
for certain coefficients
with
. We then have the relationship
We can think of the scalars
as the contribution of h to the gain of a certain graph l. This shows that the gain of l is the sum of the contributions of all sub-coalitions that compose it.
As each element
is uniquely decomposed in terms of the elements
, it is reasonable to think that the gain must be distributed in some way among the components of l. In other words, there must be a partition
such that
where we understand
as the part that will be distributed to b from the gain of l. Once we know the corresponding amount that will be distributed to
for each subgraph l, we can define the function
such that
will be this quantity. We will assume that
if
. From now on, we denote
Definition 3.1 (Partition) Let
be an
-characteristic function game. We will say that a partition of v is a collection
such that:
1.
.
2. For all
,
If
is a partition of
, we write
Before justifying the notation for partitions, we may go through an example.
Example 3.2. Consider the graph
, as shown in Figure 1. Consider the edge domain
as in Example 2.1, i.e.,
consists of all subgraphs of g without isolated points, and
consists of subgraphs representing a single edge. We have that
where
. Since
is generated by unions in
, we can think of the elements of
as subsets of
(subsets containing their respective edges). As we mentioned in Remark 2.2, there is a correspondence between
and
, and we will refer to an element
as well as the subset
interchangeably. Let v be the game defined by
The coefficients of its linear decomposition into unanimity games are
Later, we will discuss the calculation of
in the general case, as it is possible to
![]()
Figure 1.
.
obtain a recursive formula for these coefficients.
A possible partition for the game v (which we will discuss in detail later) will be the collection of functions
such that
Additionally,
outside the given tables.
The justification for our choice of notation for partitions of the
-game
is that, for any
, we have
(1)
where we think of v being divided (in a non-linear way) into the sum of certain unanimity games
Thus, (1) is equivalent to writing
The advantage of working with this decomposition is that we obtain information regarding the final distribution of gains in the coalition. Our goal now is to characterize a particular partition, which will satisfy a certain equilibrium property and be well-defined for every
-game
.
Definition 3.2 (Balanced Profit) Given an
-game
, we will say that a partition
of v has Balanced Profit if, for any
and
such that
, the following holds:
(2)
The above condition can be interpreted as follows: the difference
represents the gain of b1 obtained through collaboration with b2. Similarly, for
. By demanding that these gains to be equal, it indicates that the collaboration of both agents is equally beneficial for both parties. We will prove that for every
-game, there exists a unique partition
that satisfies Balanced Profit. For this, we have the following Lemma:
Lemma 3.1. Let
be the matrix defined as follows: 1) The first row of
is a row vector with n entries, all equal to 1. 2) Enumerate all possible pairs
with
in the set
. For each of these
elements, define the (k + 1)-th row of
as the row vector
, where the i-th entry is 1 and the j-th entry is −1. Then, the rank of
is exactly n. Therefore, given the linear system
, where
and
, if there is a solution to the system, it is unique.
Proof. See appendix 6.1. ∎
With the previous lemma, we have the following theorem:
Theorem 3.1. For every
-game
, there exists a unique partition
of v that satisfies Balanced Profit, and it is given by:
(3)
where
is the number of elements
that make up h, and
are the coefficients of the linear expansion in terms of unanimity games of v.
Proof. Uniqueness. Suppose for a moment that such a partition exists. That is,
verifies (2) for any
and any
that contains
. We will proceed by induction. In particular, we have that
however,
for every
(a property of being a partition). Therefore,
(4)
Moreover, by being a partition, we have the equation
(5)
Combining (4) and (5), we obtain the linear system
Then, the solution is given by
which are known values. Therefore, if
, we can determine
for
. Suppose that, for some
, for every
with
, we know the value of
for
. Let
such that
. Suppose that
. Due to the property of Balanced Profit for any pair
, it holds that
However,
, so
is a known value. For each pair
, we obtained the equation
(6)
which means we have
distinct equations. Also, by being a partition, we have the equation
We have a linear system with
equations in k variables, which, expressed in matrix form, gives
(7)
where
,
,
is the vector of
arranged according to the obtained equations, and
is as in Lemma 3.1. Then, the solution to (7) is unique and depends solely on known and uniquely determined values. As the above is true for every
with
, we conclude by induction that the values of
are uniquely determined for every
.
Existence. The collection of functions defined in (3) is a partition that satisfies Balanced Profit. For every
with
where
, it holds that
The equality above is due to a counting result (the term
appears as many times as there are elements
, i.e.,
times). Moreover, if
and
, it holds that
similarly
so
verifying Balanced Profit. This concludes the proof. ∎
In Example 3.2, we already presented the calculation of the partition from the above theorem.
Remark 3.1. The advantage of employing this formulation of graph-defined games is that it allows for the simplification of cooperative structure. Thus, we can work on a game defined over classes of blocks of the graph, instead of dealing with restriction on a game as the Myerson way.
As we will see later, our conception of graph-defined games enables us to generalize a Shapley-like value in a conceptually natural manner.
Remark 3.2. A potential disadvantage is the inability to consider that some nodes prefer to play alone. In other words, we cannot consider isolated nodes as blocks in
because this would imply that we cannot uniquely express a graph
. However, this allows us to analyze collective cooperative behavior beyond the individualism of players.
Remark 3.3. Regarding the calculation of coefficients
: recalling that g is our fixed ambient graph, with our domain
. Suppose
, where
is taken as in the statement of Theorem 3.1. Then,
Thus,
depends solely on
and
for
with
. These coefficients are obtained recursively since
for all
, and every
is the union of these b's.
3.2. The Value for Games Defined on Graphs
Now, we need to construct the payoff vector that will provide us with the final distribution of gains among the players. However, before proceeding, we have another important property that verifies the partition given by (1):
Lemma 3.2 (Linearity) Let
be a domain of unique decomposition, where
. We define the operator
as
Then, P is a injective linear operator, and
is the partition given by Theorem 3.1 for the game v.
Proof. It is clear since the coefficients
of the linear expansion in terms of unanimity games depend linearly on the game v. That is,
for any
. ∎
Let us recall that the elements of M are subgraphs representing (interest) coalitions of a certain set of players (nodes) N, connected through the participation of intermediaries (edges) that enable the formation of links. We think of the elements of the generating set
as the minimal collaboration structures that can occur.
For instance, if we consider the edge domain
, as in Example 2.1, the
-games are those in which we impose the condition that a player cannot participate alone in the game (cannot be an isolated point). In other words, a player can participate if and only if there exists another player and an intermediary connecting them, meaning that the player has to be part of an edge.
During the game development, the gain is determined solely by the presence or absence of the element
in the formation of a coalition, without considering the specific players themselves. Now, our focus is on finding a distribution of gains among nodes and intermediaries.
For this purpose, assume that the element
is a subgraph of the form
, meaning it is composed of players in
and intermediaries in
. From now on, we will refer to the elements of
as partners in b, always distinguishing between partners of the node class (
) and partners of the edge class (
).
Let’s assume that the partners in b agree on a distribution of the gain obtained by b in the
-game
for coalition l. In other words, they define functions
where
is defined as in (3.1), such that
(8)
These functions represent the fraction of utilities that each partner in
will receive for playing the game v and participating in coalition l. These functions can either be agreed upon by the partners and the game context or defined in a fair manner. We will discuss possible definitions of these functions later on. Note that we can extend the functions
to M, defining
for all
.
Consider, for each
, the vector
where
is the indicator function of the set
, and thus,
is a vector such that in its entry corresponding to player
, it takes the value
if
and zero otherwise. Similarly, in the entry corresponding to edge
, it takes the value
if
and zero otherwise. The previous vector contains all players and intermediaries present in the game and indicates whether they belong to b.
By Theorem 3.1, every game
can be expressed in terms of the partition given by (1), such that
We define the operator
as
Proposition 3.1. The operator
is linear with respect to the first entry. Moreover, if
and
are the j-th entry with
and a-th entry with
of
respectively, then
(9)
Proof. Equation (9) follows from our construction. It remains to verify linearity. To see this, we note that the coefficients
in the linear expansion in terms of unanimity games are linear with respect to addition. That is, if
and
, then
So, for every
, it holds that
And the linearity holds. ∎
The operator φ provides us with an assignment rule for the profits of nodes and edges for each value of l, as it indicates how much of the total gain should be assigned to each player and intermediary.
Remark 3.4. We can think of
as an operator that sends functions
to functions
.
The essence of this definition is that we obtain an operator that behaves in a quasi-linear way with respect to the partition decomposition. It is not a linear decomposition, as the coefficients in the expansion are functions
. That is, we have constructed a quasi-linear decomposition of the game v, and then we define an operator that preserves the quasi-linear structure in the sense that
where we have defined the image of our base
. Thus,
is an operator that preserves scalar functions.
Remark 3.5. Given an
, we can look at the α-th entry of the vector
, and we can see that it is given by
The above expression means that, by participating in the coalition l, the player α will receive a payment of
for each of the blocks b in which they participate.
4. Example: Productive Chains
4.1. Problem Statement
Let us examine a scenario pertaining to the production process of a specific commodity. The fabrication necessitates particular raw materials, subsequently subject to manufacturing processes for enhanced manageability. Subsequently, a manufacturing facility undertakes the production of the designated product, culminating in its distribution to a final vendor. This comprehensive progression, commencing with the extraction of raw materials and concluding with the ultimate sale of the product, is denoted as the production chain. From the initial production phase to the treatment processes, assembly, and final product sale, we shall denote these junctures as distinct phases. Intervening between each phase is an intermediary tasked with orchestrating the transition, exemplified by a logistics enterprise overseeing the transportation of goods.
To exemplify this process, consider the instance of enjoying a morning cup of coffee. The prerequisite steps involve a farmer cultivating and harvesting the beans, transporting them to a processor for requisite treatment, conveying the processed beans to a packaging facility, and ultimately disbursing the product.
It is imperative that the progression unfolds in a specific sequence: raw material extraction, processing, assembly, and sale. Consequently, a prototype delineating the sequential order of this process becomes indispensable. The entire chain can be graphically represented, wherein each process stage constitutes a node. Nodes are interconnected if they represent consecutive stages in the overall process. Thus, for the aforementioned coffee production process, the resultant model would manifest as in Figure 2.
Remark 4.1. The processes under consideration for our study will be production processes, involving the transformation of an entity A into a product B. Consequently, it is imperative that the process stages do not exhibit cyclic behavior. The entire process must culminate in a sales (distribution) stage.
Due to our economic system, there will be several distinct companies responsible for carrying out the same stage of the process, naturally engaging in competition. Each of the companies assigned to different stages decides to collaborate with one another to complete the entire process. If we anticipate deriving profit from this process, it becomes essential to have at least one company for each stage. In the absence of any one of these companies, the chain is disrupted, and consequently, no profit can be realized. We can conceptualize these situations, where different companies are responsible for various tasks, as scenarios of competition.
Each of the companies involved in the chain represents a node. If two companies decide to collaborate to form the chain, we connect them with an edge (possibly requiring an intermediary to establish this connection). We group each of the companies based on the stage of the process they undertake.
Returning to the coffee example: let’s assume there are 3 farmers cultivating coffee, 3 companies producing coffee beans, 3 packaging companies, and all of them sell their products to the same store. A possible graphical representation of this scenario is as in Figure 3.
4.2. Mathematical Formulation
Definition 4.1. We will say that a graph g contains cycles if there exists a sequence of vertices
such that
is connected to
for
,
![]()
Figure 2. Example of a productive chain.
![]()
Figure 3. Example of a competitive situation for coffee production.
and
is connected to
. We will say that the connected graph g is a tree if it does not contain cycles.
Let G be the graph representing a production chain. We have imposed that G does not contain cycles (stages that form a loop). On the other hand, in any process, there is a stage of public sale, and every stage of the process leads to its sale. Thus, there exists a node d in G representing this stage. Furthermore, for every node, there exists a path connecting it to d. From the above, we conclude that G is a tree.
Definition 4.2 (Competition Scenario) A competition scenario will be a graph
associated with the production chain
if and only if
1. There exists a partition
of the node set V.
2. Given two nodes
,
will be connected to
if and only if
,
, and
is connected to
.
Now, we want to study the situation where different companies (nodes) collaborate to complete the production process and obtain profit. We need a notion of a complete chain with respect to the process defined in G; that is, a union of companies capable of completing the entire production process.
Definition 4.3 (Subchain, complete subchain) Let
be a competition scenario associated with the production chain
. A subchain
in g is a connected subgraph of g. This implies that
is a tree.
A subchain
will be complete if there exists at least one subgraph
with
such that
is isomorphic (as graphs) to G, and moreover, if a node i in
corresponds to node s in G, then
. We denote by
the set of complete subchains in g.
In other words, a subchain is complete if and only if it contains a subgraph that corresponds one-to-one with the production process, and each node corresponds to a specific stage. Now, we can model the generation of profit in a competition scenario through a function (game) that takes the various possible alliances of companies and associates with them the profit obtained by such collaboration.
Definition 4.4 (Production Game) Let
be a competition scenario associated with the production chain
. Take
as the edge domain (as in Example 2.1) associated with g, and let
be the set of edges. We will say that a game
is a production game if and only if
for all
.
Hereinafter,
will be a competition scenario associated with the production chain
with
as the edge domain regarding g as in Example 2.1. Let
be a fixed but arbitrary game. This game admits a decomposition into unanimity games
Since G is itself a graph, we can consider its own edge domain
. Let
be the number of edges in G. Since G is connected and has m edges, there are
nodes (stages of the process). In this section, if
, we will reuse the notation
to denote the number of elements
composing h.
Proposition 4.1. Suppose G has edges. If
is a subgraph such that
, then
Proof. Any graph
such that
cannot be isomorphic to G. Isomorphisms of graphs preserve relationships between nodes (edges).
If
, any non-empty subgraph will be complete, as g is a competition scenario, so any edge-type subgraph is a subchain. There is nothing to prove in this case.
Suppose then that
. For any edge
, we have
Since
, we have
. Suppose that for
with
such that
,
. If
with
and
, then
However, since
is not a complete chain,
. ∎
Corolario 4.1. If
is not a complete subchain, then
.
Proof. Let m be the number of edges in G. If
, with
, then
by the previous proposition. If
but
, then any subgraph
is not a complete subchain, and
, so
. Then
Inductively, it is proven that if
, any subgraph
with
satisfies
, so
. ∎
The above results indicate that for the study of production games, it suffices to examine coalitions in
. In this particular case, it significantly reduces the number of coalitions that need to be studied for the calculation of the payoff value.
5. Conclusions
Summarizing, we have defined a new view on the coalitional structure in the graphs. We defined the concept of single decomposition domain, which contemplates the concept of minimum measurable coalitions. That is, we eliminate non-relevant information and work directly on a space with algebraic structure. Moreover, because of this, we can prove some results such as the existence of a value for the set defined on edges.
This new vision has the combinatorial advantage that it allows us to reduce the objects with which we have to work, which at a computational level can be useful. Furthermore, as we saw above, in specific cases, it allows us to elegantly model an industrial problem. For future work, this area can be directed towards the search for new game values that fit specific contexts, also in the generalization and construction of cooperation structures with more general objects.
Acknowledgements
I thank the Centro de Investigación en Matemáticas (CIMAT) and the University of Guanajuato (UG) for the support through the undergraduate scholarship. Also, I especially thank Francisco Sánchez Sánchez, PhD., researcher at CIMAT, and my mentor in Game Theory, for his advice and review of ideas for this work.
Appendix
A1. Proof of the Lemma
Lemma 5.1. Let
be the matrix defined as follows:
1. The first row of
is a row vector with n entries of 1.
2. Enumerate all possible pairs
with
in the set
. For each of these
elements, define the (k + 1)-th row of
as the row vector
where the i-th entry is 1, and the j-th entry is −1.
Then, the rank of
is exactly equal to n. Therefore, given the linear system
, with
and
, if there exists a solution to the system, it will be unique.
Proof. We proceed by induction. For the case
, the matrix
is
which has rank 2. Suppose the above holds for some
. Then, the matrix
is of full rank and has the form
and
is a matrix whose rows are given by point 2. The matrix
is constructed as follows
Now, since
, we have
has n linearly independent column vectors. Let
, then for
where
for all
. Furthermore, since
is injective, the mapping
that sends
is also injective. Additionally,
, so
. Finally, the vector
is linearly independent of the column vectors in the matrix
Otherwise, it would imply that there exists a coefficient vector
such that
in particular
From the last equation, it necessarily follows that
, but this vector does not satisfy the other conditions. Thus,
. This completes the proof. ∎