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Applied Game Theory in Politics

Coalition Formation

Coalition Formation in Politics

Coalition formation is a crucial aspect of politics and governance, particularly in parliamentary systems. In game theory, coalition formation is the process by which two or more players come together to form a group or coalition. The aim of coalition formation is to increase the bargaining power of the players in the coalition. A coalition can be formed for various reasons, such as to gain control of the government, to block another coalition from coming to power, or to achieve specific policy objectives. In this lesson, we will examine the concept of coalition formation in game theory and its applications in politics.

Modeling Coalition Formation

Coalition formation can be modeled using cooperative game theory. In a cooperative game, players can form coalitions and share the payoff. The payoff is the reward or outcome that each player receives based on the choices made by all the players. A coalition is stable if no other coalition can offer its members a higher payoff. A stable coalition is also known as a coalition that is internally stable. However, a coalition can still be externally unstable if there exists another coalition that can offer its members a higher payoff than the existing coalition.

Factors Influencing Coalition Formation

There are several factors that influence coalition formation. One of the most important factors is the distribution of power among the players. The distribution of power determines the bargaining power of each player and their ability to influence the outcome of the game. Players with more power are more likely to form stable coalitions and achieve their desired outcome. Another important factor is the policy preferences of the players. Players with similar policy preferences are more likely to form stable coalitions than players with diverse policy preferences.

Coalition Formation in Politics

Coalition formation is a complex process that involves multiple players and scenarios. One classic example of coalition formation in politics is the formation of a government in a parliamentary system. In such a system, multiple parties compete in an election, and the party or coalition that wins the most seats forms the government. However, if no single party or coalition wins a majority, then multiple parties may have to come together to form a government. The process of forming a coalition can be influenced by a variety of factors, such as the policy preferences of the parties, the distribution of power among the parties, and the bargaining power of individual players.


In conclusion, coalition formation is a critical aspect of politics and governance that can be modeled using game theory. The process of coalition formation is influenced by several factors, such as the distribution of power and policy preferences of the players. Understanding the dynamics of coalition formation is important for predicting political outcomes and analyzing political scenarios.

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Applications of Game Theory in Politics

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