Sequential Formation of Coalitions through Bilateral Agreements in a Cournot Setting

We study a sequential protocol of endogenous coalition formation based on a process of bilateral agreements among the players. We apply the game to a Cournot environment with linear demand and constant average costs. We show that the final outcome of any Subgame Perfect Equilibrium of the game is the grand coalition, provided the initial number of firms is high enough and they are sufficiently patient.

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Year of publication:	2006-02
Authors:	Macho-Stadler, Inés ; Pérez-Castrillo, David ; Porteiro, Nicolás
Institutions:	Departamento de Economía, Universidad Pablo de Olavide
Subject:	Coalition formation \| bilateral agreements \| Cournot

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 06.01 30 pages
Classification:	C72 - Noncooperative Games ; D62 - Externalities ; D40 - Market Structure and Pricing. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://ebvufind01.dmz1.zbw.eu/10005403983