This book is an analysis of the modern economy’s two major resource allocation mechanisms. The price mechanism has been subject to extensive examination by neoclassical economists, but there has been relatively little attention paid to the impact of the organisation of firms on allocation. Professor Ichiishi presents a distinctive theory of the firm which views firms as organisations characterised by diversity of interest among their members, but an acceptance of a coordinated choice of activities: a coalition formed when people play a cooperative game. Using a theory embodying both the neoclassical market mechanism, and the cooperative game, the author derives a number of original results thereby contributing to the theory of the firm, cooperative game theory, and general equilibrium analysis theory.