Cooperative/Non-cooperative

In game theory, games are cooperative when players can make binding agreements and share payoffs; they are non-cooperative when each player acts independently and no enforceable contracts exist. Most real-world strategic situations are non-cooperative: you can't force the other side to keep a promise. The distinction drives how you model behaviour — in cooperative games we look at coalition value and fair division; in non-cooperative games we look at best responses and equilibrium. Founders constantly face non-cooperative settings: partners, competitors, and customers all act on their own incentives. Seeing which frame applies avoids the error of assuming others will cooperate when they're better off defecting.

Classify the situation: can we bind the other side, or do we only have self-enforcing (repeated-game) incentives? In non-cooperative settings, design for incentive compatibility — make cooperation the best response. Use transparency, repeated interaction, or credible commitment to shift the game. Don't assume handshakes hold when defection pays.

Cooperative games allow binding agreements and shared payoffs; non-cooperative games do not. Most business and market situations are non-cooperative. Use the frame to decide whether to rely on agreements or to design incentive-compatible structure so cooperation is rational.