cooperative as a coalition: a game-theoretic approach

Extract: The main thesis of this paper is that many decisions involving the allocation of costs and benefits within cooperatives can be usefully conceptualized as n-person "cooperative" games. In the parlance of game theory, cooperative games are games in which players are allowed to communicate and make binding commitments with one another. The theory of cooperative games is usually used to model situations in which there are gains from joint action by a potential coalition of players, but where the players must bargain among themselves about how the net benefits of the joint action are to be shared. Failure to agree on an allocation of net benefits among players prevents the coalition from forming.