 Coalitional game theory is an approach to modeling strategic situations that stands in contrast to what's usually called non-corporative game theory. And in fact, coalitional game theory is often called corporative game theory. The names are a little misleading and I'll get back to that in a moment, but let's first speak about what situations does coalitional game theory try to model. You may recognize these two fine looking gentlemen. The person on the left is David Cameron, Prime Minister of Britain. And to his right as we look at it, his left as they sit is Nicholas Clegg, his coalitional partner. Now, here are two political rivals who nonetheless come together and presumably there's a reason. There's something where they can accomplish together that they cannot accomplish alone, in particular in this case, command a majority in the parliament. And so that's a classical example where a coalition formed. In fact, we usually, when we think about coalition, we think about political parties. But coalitions form not only in politics, they certainly form in business. So the wind coalition is coming together of a number of firms in the United States to promote the joint agenda of wind energy, turbines and such. Again, these are companies who are competitors. And nonetheless, they feel that together there's things that can do that they can't do alone. For example, lobby government established standards and things of that nature. Now, coalitions aren't always among organizations or parties or firms or heavyweight things. We as individuals routinely come together to accomplish things together, whether it's to enter in marriage or, for example, build a house. When you have a carpenter, an electrician and a painter that come together, they together can accomplish something that they can't on their own. Now, the mere fact that people come together doesn't mean that their interests are aligned or that they bring the same amount of value to the coalition they've formed. It could be, for example, that the framer of a construction crew is irreplaceable, but electricians are easy to find and one could easily replace. And presumably, when they get paid for the house they build, that should be reflected in how they divide the payment. And so there's a competition of both cooperation and competition here. And so for that reason, calling these cooperative games, as the common term is, is a little misleading, just as much as non-corporative game theories misleading as well, because, for example, if you look at the normal form game, the canonical representation of a non-corporative game, one can easily describe a completely harmonic situation of so-called team games or common payoff games where the interests of the agents are completely aligned. So both non-corporative game theory and coalitional or cooperative game theory model both competition and coordination. The essential difference is the basic modeling unit. In coalitional game theory, the basic modeling unit is the group, the team, and what they can accomplish, and the analysis is based on this basic modeling.