Abstract

The ancient problems of bankruptcy, contested garment, and rights arbitration have generated many studies, debates, and controversy. The objective of this paper is to show that the Shapley value from game theory, measuring the power of each player in a game, may be consistently applied for getting the general one-step solution of all these three problems viewed as -person games. The decision making is based on the same tool, namely the game theory logic based on the use of the Shapley value, but the specific games involved are slightly different in each problem. The kind of claims of the players, the relationship between the given claims and the given resources available, and the particular way of calculating the generalized characteristic function of the game determine the specific type of game which has to be solved in each of the three ancient problems mentioned. The iterative use of the Shapley value may also justify the well-known Aumann-Maschler step-by-step procedure for solving the bankruptcy problem