Currarini, Sergio and Marini, Marco A. (2002): Sequential play and cartel stability in a Cournot oligopoly.
Download (181Kb) | Preview
We reconsider the problem of cartel stability in a linear symmetric Cournot oligopoly by assuming that every coalition of firms defecting from a cartel can choose its quantity before the remaining firms. We show that differently from Salant et al. (1983) the only profitable cartel includes all firms in the industry. This result is shown to be robust to non linearities in payffs provided that the inverse demand function is not too log-concave.
|Item Type:||MPRA Paper|
|Original Title:||Sequential play and cartel stability in a Cournot oligopoly|
|Keywords:||Cartel Stability, Cournot Oligopoly|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General
D - Microeconomics > D4 - Market Structure and Pricing > D40 - General
|Depositing User:||Marco A. Marini|
|Date Deposited:||26. Apr 2010 06:24|
|Last Modified:||17. Feb 2013 22:24|
Amir, R. (1996), ”Cournot Oligopoly and the Theory of Supermodular Games”, Games and Economic Behaviour 15, 132-148.
Bloch, F. (1996) ”Sequential Formation of Coalitions in Games with Fixed Payoff Division”, Games and Economic Behaviour, 14, 537-556.
Bloch, F. (1997) ”Non Cooperative Models of Coalition Formation in Games with Spillovers”. In: Carraro C. Siniscalco D. (eds.) New Directions in the Economic Theory of the Environment. Cambridge University Press, Cambridge.
Bulow, J., Geanokoplos, J. and Klemperer, P. (1985), ”Multimarket Oligopoly: Strategic Substitutes and Complements”, Journal of Political Economy 93, 488-511.
Currarini, S., Marini, M. (2002), ”A Sequential Approach to the Characteristic Function and the Core in Games with Externalities”. forthcoming in: Sertel, M., Kara, A.(eds.), Advances in Economic Design. Springer Verlag, Berlin.
Hart S, Kurz M (1983) ”Endogenous Formation of Coalitions”. Econometrica 52: 1047-1064.
Salant, S.W., Switzer, S..and Reynolds,-R.,J. (1983), Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium, Quarterly Journal of Economics 98: 185-99.
Vives, X. (2000), Oligopoly Pricing, Cambridge Mass., M.I.T. Press.
Yi, S.-S. (1997), ”Stable Coalition Structure with Externalities”, Games and Economic Behaviour, 20: 201-237.