Theories of Coalition Formation

Abstract

As we have seen, the main thrust of the theory of cooperative games has been based on the concept of a solution, typically represented by a set of imputations, that is, distributions of some collectively achieved gain among the players. The sum of the payoffs defining an imputation represents the most that the players acting as a grand coalition can attain. It follows that the principal concern of this branch of game theory is with conflict resolution. The solution of the game represents, after all, a resolution of the conflicts of interests among the players. In the context of a normative theory, the solution of a game (in the form of a set of imputations) is rationalized as satisfying certain a priori stated principles of fairness or stability.