Formation of cartels in glove markets and the modiclus. (Q1865791)

The authors discuss market games or linear production games with a large finite set of agents. The representing distributions of initial assignments are assumed to be uniform distributions with disjoint carriers. Thus, the agents decompose into finitely many disjoint groups where each holds a corner of the market. The authors argue that the formation of cartels should be explained endogenously by following a paper of \textit{S. Hart} [J. Econ. Theory 7, 453-466 (1974)]. Accordingly, they present a solution concept of modified nucleolus (or modiclus) that not only predicts cartelization but also explains the profits of the long side by its preventive power.