Error message

Deprecated function: Array and string offset access syntax with curly braces is deprecated in include_once() (line 20 of /mnt/web104/a0/07/510451407/htdocs/includes/

A Sequential Approach to the Characteristic Function and the Core in Games with Externalities

Printer-friendly version
Working paper
Sergio Curraini and Marco Marini
Issue number: 
This paper propose 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 always nonempty when the game has strategic complementarities. We apply this result to cartel formation in Bertrand oligopoly and in Shapley-Shubik (1977) strategic market games.
Developed by Paolo Gittoi