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Optimal Deterrence of Cooperation

Stéphane Gonzalez () and Aymeric Lardon

No 2016-22, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis

Abstract: We introduce axiomatically a new solution concept for cooperative games with transferable utility inspired by the core. While core solution concepts have investigated the sustainability of cooperation among players, our solution concept, called contraction core, focuses on the deterrence of cooperation. The main interest of the contraction core is to provide a monetary measure of the robustness of cooperation in the grand coalition. We motivate this concept by providing optimal fine imposed by competition authorities for the dismantling of cartels in oligopolistic markets. We characterize the contraction core on the set of balanced cooperative games with transferable utility by four axioms: the two classic axioms of non-emptiness and individual rationality, a superadditivity principle and a weak version of a new axiom of consistency.

Keywords: TU-game; contraction core; optimal fine; Cournot oligopoly; axiomatization (search for similar items in EconPapers)
JEL-codes: C71 D43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth, nep-mic, nep-ore and nep-upt
Date: 2016-06, Revised 2017-06
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http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2016-22.pdf Revised version, 2017-06 (application/pdf)

Related works:
Journal Article: Optimal deterrence of cooperation (2018) Downloads
Working Paper: Optimal Deterrence of Cooperation (2018)
Working Paper: Optimal Deterrence of Cooperation (2016) Downloads
Working Paper: Optimal Deterrence of Cooperation (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2016-22

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