Coalitional Approaches to Collusive Agreements in Oligopoly Games

Currarini, S. M.A. Marini (2015) "Coalitional Approaches to Collusive Agreements in Oligopoly Games", The Manchester School (2015) 83, 3, 253–378,

20 Pages Posted: 22 Nov 2011 Last revised: 15 Apr 2020

See all articles by Sergio Currarini

Sergio Currarini

University of Leicester - Department of Economics; Ca Foscari University of Venice - Dipartimento di Economia

Marco A. Marini

University of Rome La Sapienza; CREI, University Rome III

Multiple version iconThere are 2 versions of this paper

Date Written: January 1, 2015

Abstract

In this paper we review a number of coalitional solution concepts for the analysis of the stability of cartels and mergers under 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 first consider the basic problem of the stability of the whole industry association of firms under oligopoly and, for this purpose, we introduce the concept of core in games with externalities. We show that different assumptions on the behavior as well as on the timing of the coalitions of firms yield very different results on the set of allocations which are core-stable. We then consider the stability of associations of…firms organized in coalition structures different from the grand coalition. To this end, various coalition formation games recently introduced by the so called endogenous coalition formation literature are critically reviewed. Again, different assumptions concerning the timing and the behavior of firms are shown to yield a wide range of different results.

Keywords: cooperative games, coalitions, mergers, cartels, core, games with externalities, endogenous coalition formation

JEL Classification: C70, C71, D23, D43

Suggested Citation

Currarini, Sergio and Marini, Marco A., Coalitional Approaches to Collusive Agreements in Oligopoly Games (January 1, 2015). Currarini, S. M.A. Marini (2015) "Coalitional Approaches to Collusive Agreements in Oligopoly Games", The Manchester School (2015) 83, 3, 253–378, , Available at SSRN: https://ssrn.com/abstract=1963089 or http://dx.doi.org/10.2139/ssrn.1963089

Sergio Currarini

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

Marco A. Marini (Contact Author)

University of Rome La Sapienza ( email )

Piazzale Aldo Moro, 5
Rome, 00181
Italy
+39 06 49910843 (Phone)

HOME PAGE: http://sites.google.com/a/uniroma1.it/marcomarini-eng/

CREI, University Rome III ( email )

Via Ostiense, 161
Rome, 00154
Italy

HOME PAGE: http://host.uniroma3.it/centri/crei/

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