A Sequential Approach to the Characteristic Function and the Core in Games with Externalities

Currarini, Sergio; Marini, Marco A.

doi:10.1007/978-3-662-05611-0_14

Cited by 20 publications

(22 citation statements)

References 23 publications

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“…Since it was already proved (e.g. Currarini and Marini, ) that in all games in which players actions are strategic complements λ ‐ and γ ‐core are non‐empty (see also Lardon, ) it does not come as a surprise that in a Cournot oligopoly game in which goods are complements (and actions strategic complements) the core is non‐empty if remaining firms form a sufficient number of coalitions in response to a deviation.…”

Section: Extensionsmentioning

confidence: 99%

Coalitional Approaches to Collusive Agreements in Oligopoly Games

Currarini

Marini

2014

The Manchester School

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In this paper we review a number of coalitional solution concepts for the analysis of cartel and merger stability in oligopoly. We show that, although so far the industrial organization and the cooperative game theoretic literature have proceeded somehow independently on this topic, the two approaches are highly inter‐connected. We show that different assumptions on the behaviour and on the timing of the coalitions of firms yield very different results on the associations of firms which are stable. We conclude by reviewing some recent extensions of the coalitional analysis to oligopolistic markets with heterogeneous firms and incomplete information.

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Section: Extensionsmentioning

confidence: 99%

Coalitional Approaches to Collusive Agreements in Oligopoly Games

Currarini

Marini

2014

The Manchester School

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“…The grand coalition inevitably falls apart and a stable but small coalition prevails. Extensions and modifications of the approach were proposed by Currarini/Marini [8] and Marini [9], but in this paper our focus is more on the incentives of single countries to enter or to leave a coalition and not on the characterization of cores of cooperative games. Other papers that come to relatively optimistic conclusions regarding the size of stable coalitions are concerned with issue linking, e.g., combining climate policies with trade or innovation policies.…”

Section: Introductionmentioning

confidence: 99%

Stable International Environmental Agreements: Large Coalitions that Achieve Little

Rauscher

2019

Games

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A standard result of coalition formation games is that stable coalitions are very small if the coalition plays Nash vis-à-vis the rest of the world and if abatement costs are quadratic. It has been shown that larger coalitions and even the grand coalition are possible if the marginal abatement cost is concave. The paper confirms this result, but shows that abatement activities by large coalitions smaller than the grand coalition can be very small. This can be ‘repaired’ only by assuming that the marginal abatement cost curve changes its curvature extremely once the stable coalition has been reached.

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“…A more general result for any number of firms is provided by Chander (2010). Currarini & Marini (2003) built a refinement of the γ-core by assuming that the deviant coalition acts as a Stackelberg leader in the product market. Zhao (1999) showed that the α and β cores of oligopolistic markets are non-empty.…”

Section: Introductionmentioning

confidence: 99%

Cooperative oligopoly games with boundedly rational firms

Lekeas¹,

Stamatopoulos

2014

Ann Oper Res

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We analyze cooperative Cournot games with boundedly rational firms. Due to cogni- tive constraints, the members of a coalition cannot accurately predict the coalitional structure of the non-members. Thus, they compute their value using simple heuris- tics. In particular, they assign various non-equilibrium probability distributions over the outsiders' set of partitions. We construct the characteristic function of a coalition in such an environment and we analyze the core of the corresponding games. We show that the core is non-empty provided the number of firms in the market is sufficiently large. Moreover, we show that if two distributions over the set of partitions are related via first-order dominance, then the core of the game under the dominated distribution is a subset of the core under the dominant distribution.Comment: Draft version of the published ANOR paper, Annals of Operations Research, May 201

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A Sequential Approach to the Characteristic Function and the Core in Games with Externalities

Cited by 20 publications

References 23 publications

Coalitional Approaches to Collusive Agreements in Oligopoly Games

Coalitional Approaches to Collusive Agreements in Oligopoly Games

Stable International Environmental Agreements: Large Coalitions that Achieve Little

Cooperative oligopoly games with boundedly rational firms

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