Group-level cooperation

Nicolas Quérou ()
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Nicolas Quérou: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier

CEE-M Working Papers from CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro

Abstract: We analyze the existence, coordination and efficiency effects of group-level cooperation in games featuring heterogeneous strategic spillovers and externalities within and between groups of agents. Conclusions depend on whether out-group interactions feature strategic substitutes or complements. Under high out-group strategic spillovers, group-level cooperation triggers either equilibrium existence or coordination issues. When these effects are not too high, a unique group-level cooperation equilibrium exists and its characterization depends on the in-group externality level. With respect to efficiency, cases are characterized under which this initiative is self-enforcing. Conditions are also provided under which it backfires: the cooperating group members would be actually better off if they could ex-ante commit to not cooperate, even if it would be costly to do so.

Keywords: spillover effects.; strategic interactions; group-level cooperation; Externalities (search for similar items in EconPapers)
Date: 2026
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