In 2012, Lloyd Shapley received the Nobel prize in economics for his pioneering work in game theory. Most economists and policy scholars had little knowledge of him at that point, much of his work being on on the mathematics of cooperative n-person games (as opposed to noncooperative theory). The talk will focus on the importance, and application of, cooperative theory to policy studies. Its longest-standing area of application has been in the area of water resource management, but its potential for influencing other areas of policy research will also be discussed. It can be seen as an extension of game-theoretic models beyond prisoner’s dilemma and commons-type games taken up by Hardin and Ostrom. The concepts of the core and the value, both due to Shapley, are particularly interesting for policy applications. We illustrate their application with a couple of examples from water resource management –specifically, assigning the costs of a multi-purpose water reuse project in Southern California, and allocating marine area across energy, fishing, and ecological conservation in the North Sea. The talk explores Shapley’s wide-ranging theoretical contributions, as well as the potential influence of cooperative theory as a heuristic for interpreting real-world policy situations. In the process, people unacquainted with this branch of game theory will gain insight on how cooperative solutions are defined and calculated.