Lahore Metro Map on Besides proposing an equilibrium for non-cooperative games, Nash addressed the same issue for cooperative games. Suppose that two players are at a status quo level of well-offness and can negotiate so that each would become better off. If ui is the utility or well-offness level of player i, and di is the value of that well-offness in the status quo, then Nash proposed finding the best solution for both players simultaneously by maximizing the following function for players 1 and 2 over the set of possible outcomes: 6.U = (u d)*(u d).
Subtracting off the d-levels essentially eliminates any status quo bias in favor of one or the other, to assess what is the maximum improvement that can happen.
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The multiplicative nature of the function ties the welloffness of each to that of the other. For games with n>2 players, the function in 6) becomes the product of (ui di) for all i.
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