Stable Coalition Structures with Open Membership and Asymmetric Firms

Belleflamme, Paul

doi:10.1006/game.1998.0708

Cited by 39 publications

(26 citation statements)

References 22 publications

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“…This article is related to the literature on the noncooperative theory of endogenous formation of coalitions-the literature that deals with situations in which players first form coalitions and then, given the coalition structure determined, engage in noncooperative competition. Papers in this literature include Bloch (1995Bloch ( , 1996, Yi (1996Yi ( , 1997Yi ( , 1998, Konishi et al (1997), Belleflamme (2000), Yi and Shin (2000), and Morasch (2000). They concentrate on examining the equilibrium (or stable) structures of coalitions-the equilibrium numbers and the sizes of coalitions-in models with various applications.…”

Section: Introductionmentioning

confidence: 99%

Strategic Groups and Rent Dissipation

Baik

Lee²

2001

Economic Inquiry

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We consider a rent‐seeking contest in which players can form strategic groups before expending their outlays. We examine the profitability of endogenous group formation and the effect of such group formation on rent dissipation. We show the following: When just one strategic group is formed in equilibrium, group formation is beneficial both to the group members and to the nonmembers, and rent dissipation is smaller than with usual individual rent seeking. However, when more than two strategic groups are formed in equilibrium, group formation is never profitable to any players, and rent dissipation is greater than with individual rent seeking.

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Section: Introductionmentioning

confidence: 99%

Strategic Groups and Rent Dissipation

Baik

Lee²

2001

Economic Inquiry

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“…This is because the benefits of cooperation increases linearly with the size of the coalition and, therefore, in an open membership game there is no reason to remain out of the industry‐wide association of firms. Belleflamme () shows that this result extends to the case with asymmetric associations but not to the case with symmetric associations and asymmetric firms. In particular, when firms obtain different benefits in joining an association, several associations might form or a pure strategy Nash equilibrium coalition structure might even fail to exists.…”

Section: Extensionsmentioning

confidence: 97%

Coalitional Approaches to Collusive Agreements in Oligopoly Games

Currarini

Marini

2014

The Manchester School

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In this paper we review a number of coalitional solution concepts for the analysis of cartel and merger stability in oligopoly. We show that, although so far the industrial organization and the cooperative game theoretic literature have proceeded somehow independently on this topic, the two approaches are highly inter‐connected. We show that different assumptions on the behaviour and on the timing of the coalitions of firms yield very different results on the associations of firms which are stable. We conclude by reviewing some recent extensions of the coalitional analysis to oligopolistic markets with heterogeneous firms and incomplete information.

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“…This important property has been studied under different names ["orthogonality" in Guesnerie and Oddou (1988), "games without externalities" in Bloch (1996), or "games without spillovers" in Konishi, Le Breton and Weber (1997e)]. 4 It obviously rules out some important group formation problems, such as cartel or association agreements in industrial organization (Bloch, 1995;Belleflamme, 2000), custom unions (Yi, 1997) or environmental agreements (Chandler and Tulkens, 1997;Ray and Vohra, 2001). Note that we use the term "group formation" here rather than "coalition formation", which covers strategic settings where independent players have the opportunity to form coalitions and make bidding agreements.…”

Section: Non-cooperative Frameworkmentioning

confidence: 99%