On the Core of Dynamic Cooperative Games

We consider dynamic cooperative games, where the worth of coalitions varies over time according to the history of allocations. When defining the core of a dynamic game, we allow the possibility for coalitions to deviate at any time and thereby to give rise to a new environment. A coalition that considers a deviation needs to take the consequences into account because from the deviation point on, the game is no longer played with the original set of players. The deviating coalition becomes the new grand coalition which, in turn, induces a new dynamic game. Each stage game of the new dynamic game depends on the previous allocation. We define and characterize a new solution concept, the intertemporal core.