chapter  10
Bargaining and cooperation
Pages 16

The world we’re in can hardly be described by a series of cooperative games. If you have gone through the previous chapters, you should be aware by now of how little cooperation one may hope to observe in economics and politics, as well as in other areas of life. Having said that, there are many aspects of economics, politics and international relations where negotiations are most relevant, and therefore a book on game theory is incomplete if it doesn’t contain an illustration of cooperative and bargaining games. However, explaining and understanding these games is no easy task, because of the amount and nature of formal analysis that they require even at an introductory level. Here, to keep the exposition in line with the remainder of the book, I will lay out the basics of this very relevant part of game theory, and propose two simple examples that give a flavour of the range of potential applications.