Our results indicate that patients must be treated with SGB therapy precociously to receive its full benefits.

Abstract. This paper proposes a formulation of coalitional payoff possibilities in games with externalities, based on the assumption that forming coalitions can exploit a "first mover advantage". We derive a characteristic function and show that when outside players play their best response noncooperatively, the core is nonempty in games with strategic complements. We apply this result to Cournot and Bertrand games and to public goods economies.

This note considers cartel stability when the cartelized products are vertically differentiated. If market shares are maintained at pre-collusive levels, then the firm with the lowest competitive price-cost margin has the strongest incentive to deviate from the collusive agreement. The lowest-quality supplier has the tightest incentive constraint when the difference in unit production costs is sufficiently small.

We prove that a su¢cient condition for the core existence in a n-Örm vertically di §erentiated market is that the qualities of Örmsí products are equally-spaced along the quality spectrum. This result contributes to see that a fully collusive agreement among Örms in such markets is more easily reachable when product qualities are not distributed too asymmetrically along the quality ladder.

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This paper presents a new cooperative equilibrium for strategic form games, denoted Conjectural Cooperative Equilibrium (CCE). This concept is based on the expectation that joint deviations from any strategy pro…le are followed by an optimal and noncooperative reaction of non deviators. We show that CCE exist for all symmetric supermodular games. Furthermore, we discuss the existence of a CCE in speci…c submodular games employed in the literature on environmental agreements.

Research on collusion in vertically di §erentiated markets is conducted under one or two potentially restrictive assumptions. Either there is a single industry-wide cartel or costs are assumed to be independent of quality or quantity. We explore the extent to which these assumptions are indeed restrictive by relaxing both. For a wide range of coalition structures, proÖt-maximizing cartels of any size price most of their lower quality products out of the market as long as production costs do not increase too much with quality. If these costs rise su¢ciently, however, then market share is maintained for all product variants. All cartel sizes may emerge in equilibrium when exclusively considering individual deviations, but the industry-wide cartel is the only one immune to deviations by coalitions of members. Overall, our Öndings suggest that Örms have a strong incentive to coordinate prices when the products involved are vertically di §erentiated.

This paper establishes sufficient conditions for the existence of a stable coalition structure in the "coalition unanimity" game of coalition formation, first defined by Hart and Kurz (1983) and more recently studied by Yi (1997, 2003). Our conditions are defined on the strategic form game used to derive the payoffs of the game of coalition formation. We show that if no synergies are generated by the formation of coalitions, a stable coalition structure always exists provided that players are symmetric and either the game exhibits strategic complementarity or, if strategies are substitutes, the best reply functions are contractions.