ABSTRACT
In this chapter, a modification of bargaining set theory is introduced that incorporates a novel way of thinking about coalitions, coalitional power, and bargaining. In this new conceptualization, it is no longer assumed that the characteristic function representation adequately and accurately portrays the players’ perception of the power of coalitions in the game. Instead, power bargaining set theory explicitly employs assumptions about the psychology of the players to derive a representation of the power of coalitions in the game. Then, the familiar tools of objection and counterobjection are brought to bear in a delicate interplay between the characteristic function and the power representation of the game in order to produce a solution.
