Cartel formation in Cournot competition with asymmetric costs: a partition function approach
Summary: In this paper, we use a partition function form game to analyze cartel formation among firms in Cournot competition. We assume that a firm obtains a certain cost advantage that allows it to produce goods at a lower unit cost. We show that if the level of the cost advantage is ``moderate, then the firm with the cost advantage leads the cartel formation among the firms. Moreover, if the cost advantage is relatively high, then the formed cartel can also be stable in the sense of the core of a partition function form game. We also show that if the technology for the low-cost production can be copied, then the cost advantage may prevent a cartel from splitting.
- A dynamic approach to cartel formation
- A recursive core for partition function form games
- A simple model of imperfect competition where 4 are few and 6 are many
- A theory of endogenous coalition structures
- Consistency and the core in games with externalities
- Endogenous Formation of Coalitions
- Expectation formation rules and the core of partition function games
- Games in sequencing situations with externalities
- Monotonic core allocation paths for assignment games
- Partition function form games. Coalitional games with externalities
- Population monotonic allocation schemes for cooperative games with transferable utility
- Population monotonic allocation schemes for games with externalities
- Stable coalition structures with externalities
- The non-emptiness of the core of a partition function form game
- Collusive behaviour under cost asymmetries when firms compete in supply functions
- Cournot's oligopoly equilibrium under different expectations and differentiated production
- Non-cooperative representations of cooperative games
- Formation of an ordered constrained coalition in Cournot oligopoly setting with precedence constraints
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