Cooperative Game Theory:

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Definition: Cooperative game theory deals with situations where players can form coalitions and make binding agreements among themselves.
Focus: The focus is on the grand coalition, where all players join forces to maximize their collective payoff.
Solution Concepts: Cooperative games often involve solution concepts like the core, Shapley value, and nucleolus. These concepts help allocate the total payoff among coalition members in a fair or stable way.
Communication: Communication and negotiation among players are essential in cooperative games. Players can discuss strategies, make promises, and enforce agreements.
Examples: Many real-world scenarios, such as business collaborations, political alliances, and joint ventures, can be modeled using cooperative game theory.

Non-cooperative Game Theory:

Definition: Non-cooperative game theory deals with situations where players make decisions independently without forming binding agreements.
Focus: The focus is on individual actions and strategies. Players act in their own self-interest, considering others as independent decision-makers.
Solution Concepts: Nash equilibrium is a central concept in non-cooperative games. It represents a situation where no player has an incentive to unilaterally deviate from their chosen strategy.
Communication: Players in non-cooperative games typically don’t communicate or form explicit agreements. The outcomes are determined by each player’s strategy, given the strategies chosen by others.
Examples: Common examples include competitive markets, strategic interactions in business, and many situations in everyday life where individuals or entities make decisions without formal collaboration.

In summary, cooperative game theory involves players forming coalitions and making binding agreements, while non-cooperative game theory focuses on independent decision-making without formal agreements, often leading to Nash equilibrium outcomes.