Sequential Formation of Coalitions through Bilateral Agreements in a Cournot Setting

Ines Macho-Stadler, David Perez-Castrillo and Nicolás Porteiro

No 06.01, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: We study a sequential protocol of endogenous coalition formation based on a process of bilateral agreements among the players. We apply the game to a Cournot environment with linear demand and constant average costs. We show that the final outcome of any Subgame Perfect Equilibrium of the game is the grand coalition, provided the initial number of firms is high enough and they are sufficiently patient.

Keywords: Coalition formation; bilateral agreements; Cournot. (search for similar items in EconPapers)
JEL-codes: C72 D40 D62 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2006-02
New Economics Papers: this item is included in nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://www.upo.es/serv/bib/wps/econ0601.pdf First version, 2006 (application/pdf)

Related works:
Journal Article: Sequential Formation of Coalitions Through Bilateral Agreements in a Cournot Setting (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:06.01

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