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I read that normative theories such as social welfare and game theory have as tasks computing the peoples' (average) utility function in the first case, and the characteristic function in cooperative games with transferable utility. Moreover, in game theory the characteristic function constitutes "the game" itself.

I appreciate very much any gentle intuitive explanation of the difference between these two concepts.

(Edited: Thanks for the comment; the question is edited)

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  • $\begingroup$ I disagree with some of these claims. I don't think this is the main task of either social welfare or game theory. Also you seem to be thinking of cooperative game theory which is very distinct from non-cooperative game theory so it may be worth making the distinction. $\endgroup$ – Giskard Dec 13 '16 at 8:49

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