The paper studies how does the size of a cartel affect the possibility that its members can sustain a collusive agreement. I obtain that collusion is easier to sustain the larger the cartel is. Then, I explore the implications of this result on the incentives of firms to participate in a cartel....

It is well known that the profitability of horizontal mergers with quantity competition is scarce. However, in an asymmetric Stackelberg market we obtain that some mergers are profitable. Our main result is that mergers among followers become profitable when the followers are inefficient enough....

A new solution concept to monotonic cooperative games with nontransferable utility is introduced. This proposal, called the coalitional equal-loss solution, is based on the idea that players withing a coalition should have equal losses from a point of maximum expectations. The proposal...

This paper examines the stability of deterministic steady-states with a one dimensional state-variable and a smooth, recursive updating rule. It is shown that the only possibly stable steady states are those associated with random walk beliefs, provided there is motion on a center manifold,...

The aim of this paper is to show the relation among equilibria in models with different levels of rationality. The different levels of rationality are defined in terms of the number of iterations that a player can perform with a simple rule for updating beliefs. It is shown that the rule...

A model of "satisficing" behavior in the repeated Prisoners Dilemma is studied. Each player has an aspiration at each date, and takes an action. [S]he switches from the action played in the previous period only if the achieved payoff fell below the aspiration level (with a probability that...

In meta-bargaining theory we consider (two-person) bargaining games and we assume that the agents want to apply two different bargaining situations. A mechanism is a function which assigns to every meta-bargaining game an allocation depending on the two bargaining solutions supported by the...

A weaker than usual continuity condition for acyclic preferences is introduced. For preorders this condition turns out to be equivalent to lower continuity, but in general this is not true. By using this condition, a numerical representation which is upper semicontinuous is obtained. This fact...

This paper compares alternative time-varying volatility models for daily stock-returns using data from Spanish equity index IBEX-35. Specifically, we have estimated a parametric family of models of generalized autoregressive heteroskedasticity (which nests the most popular symmetric and...