Application of Shapley Value Method in Profits Allocation of Cooperation of Enterprises, Colleges and Institutes

Abstract

Cooperation of enterprises, colleges and institutes in essence is the management of knowledge supply chain. The cooperation can bring about excess earnings, with fair and reasonable profit allocation playing the role of power mechanism which facilitates cooperation of partners. We adopt a method that combines qualitative and quantitative research and establishes the profit allocation mechanism bonding cooperation of enterprises, colleges and institutes. Empirical analysis of cooperation profits allocation methods are carried out with the application of Shapley value.

Supply Chain Fair Profit Allocation Based on Risk and Value Added for Sugarcane Agro-industry

“…The Shapley value has been widely applied in many cases due to its performance in solving risk and reward sharing (Alparslan Gök et al, 2010). The basic allocation principle of the Shapley value is to ensure fairness by sharing the profit gained by the coalition among all players with respect to their marginal contribution to the coalition (Wu, 2010).…”

“…( 1 + 2 ) = ( 1 ) + ( 2 ), ∈ The Shapley value also stands for the assumption that players will gain more payoff in a coalition than doing it alone. The maximum profit of the games is achieved when all players cooperate and makes a coalition (Wu, 2010). This assumption is also called as super-additivity, that is, the payoff of coalition K and S must be better than the resulting payoff when they do not cooperate.…”