Formation of a Coalition-Proof Stable Cartel

Thoron, Sylvie

doi:10.2307/136377

Cited by 54 publications

(54 citation statements)

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“…Hence, there is no merger at all for > 59; and there is a unique merger con…guration of 1+4)2+3)1+5 for 44 < 59. 19 Six …rms N = f1; 2; 3; 4; 5; 6g: We can show that N 1 = 38:26, N 2 = 40:43, and N 3 = 45:57. If there are four mergers with …rm i being acquired in the …rst round, then the remaining …ve …rms will proceed as in the …ve-…rm case when .…”

Section: Discussionmentioning

confidence: 87%

Merger waves: a model of endogenous mergers

Qiu¹,

Zhou

2007

The RAND J of Economics

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We develop a model of endogenous mergers to study their dynamic process. Firms choose whether, when, and with whom to merge. Two necessary conditions are identi…ed for mergers to occur: …rm heterogeneity and negative demand shocks. We show that mergers are strategic complements and therefore tend to occur in waves. Moreover, some mergers occur for strategic reasons in order to precipitate further mergers.

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Section: Discussionmentioning

confidence: 87%

Merger waves: a model of endogenous mergers

Qiu¹,

Zhou

2007

The RAND J of Economics

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“…Katz (1986) andDe Bondt (1997) use the D 'Aspremont et al (1983) definition of coalition stability to study collusion in R&D games with spillovers. Thoron (1998) shows that stable coalitions and Nash equilibrium outcomes to the binary action participation game are equivalent. Kohler (2002) uses the definition of stability to study cooperation in monetary policy.…”

Section: Introductionmentioning

confidence: 99%

Participation games and international environmental agreements: A non-parametric model

Karp

Simon

2013

Journal of Environmental Economics and Management

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Abstract. We examine the size of stable coalitions in a participation game that has been used to model international environmental agreements, cartel formation, R&D spillovers, and monetary policy. The literature to date has relied on parametric examples; based on these examples, a consensus has emerged that in this kind of game, the equilibrium coalition size is small, except possibly when the potential benefits of cooperation are also small. In this paper, we develop a non-parametric approach to the problem, and demonstrate that the conventional wisdom is not robust. In a general setting, we identify conditions under which the equilibrium coalition size can be large even when potential gains are large. Contrary to previously examined leading special cases, we show that reductions in marginal abatement costs in an international environmental game can increase equilibrium membership, and we provide a measure of the smallest reduction in costs needed to support a coalition of arbitrary size.

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“…In order to determine the equilibrium partition of the population of …rms between the brown and green types, we resort to a stability condition borrowed from coalition theory and used in the literature discussing the optimal size of a cartel facing a competitive fringe, as in d 'Aspremont et al (1983), Donsimoni (1985), Donsimoni et al (1986) and Thoron (1998).…”

Section: Lemmamentioning

confidence: 99%

Competition Among Coalitions in a Cournot Industry: A Validation of the Porter Hypothesis

2015

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We determine the emergence of the Porter Hypothesis in a large oligopoly setting where the industry-wide adoption of green technologies is endogenously determined as a result of competition among coalitions. We examine a setting where the initial technology is polluting, …rms decide whether to be brown or green and compete in quantities. We …nd that the Porter hypothesis may emerge as a market con…guration with all green …rms spurred by environmental regulation, even if consumers are not environmentally concerned. Finally, we single out the necessary and su¢ cient conditions under which the green grand coalition is socially optimal and therefore yields a win-win outcome.JEL codes: L13, L51, Q50.

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Formation of a Coalition-Proof Stable Cartel

Cited by 54 publications

References 0 publications

Merger waves: a model of endogenous mergers

Merger waves: a model of endogenous mergers

Participation games and international environmental agreements: A non-parametric model

Competition Among Coalitions in a Cournot Industry: A Validation of the Porter Hypothesis

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