This important book, written by some of the leading scholars in the field, provides a comprehensive overview of recent advances in coalition theory and presents both the latest theoretical developments and novel applications in the field of economics. The authors demonstrate the many uses of coalition theory and its ability to address a whole host of complex economic problems, such as the provision of global public goods, the adoption of co-operative R&D strategies and the emergence of sovereign states. By highlighting important game-theoretic results they are able to compare and contrast the effectiveness of different approaches. Some of the specific topics addressed include: advances in the theory of large co-operative gamesnon co-operative models of coalition formationa survey of the partition function in the formation of coalitionsfarsightedness in coalition formationcoalition stabilitycoalition formation in industrial economics, trade theory, environmental economics, public finance.This essential study of recent theories of coalition and group formation will arm the reader with a new set of tools with which to analyse a variety of problematic economic issues. It will prove invaluable to economists, ecologists, and political and social scientists.