Cooperation and Efficiency in Markets

2011
ISBN: 978-3-642-19762-8
Verlag: Springer

Buch, Englisch, Band 649, 92 Seiten, Paperback, Format (B × H): 155 mm x 235 mm, Gewicht: 166 g

Reihe: Lecture Notes in Economics and Mathematical Systems

The book deals with collusion between firms on both sides of a market that is immune to deviations by coalitions. We study this issue using an infinitely countably repeated game with discounting of future single period payoffs. A strict strong perfect equilibrium is the main solution concept that we apply. It requires that no coalition of players in no subgame can weakly Pareto improve the vector of continuation average discounted payoffs of its members by a deviation. If the sum of firms' average discounted profits is maximized along the equilibrium path then the equilibrium output of each type of good is produced with the lowest possible costs. If, in addition, all buyers are retailers (i.e., they resell the goods purchased in the analyzed market in a retail market) then the equilibrium vector of the quantities sold in the retail market is sold with the lowest possible selling costs. We specify sufficient conditions under which collusion increases consumer welfare.

Zielgruppe

Research

Autoren/Hrsg.

Hornia¿ek, Milan

Horniacek, Milan

Fachgebiete

• Wirtschaftswissenschaften Volkswirtschaftslehre Wirtschaftssysteme, Wirtschaftsstrukturen
• Wirtschaftswissenschaften Volkswirtschaftslehre Volkswirtschaftslehre Allgemein Makroökonomie
• Wirtschaftswissenschaften Volkswirtschaftslehre Volkswirtschaftslehre Allgemein Industrielle Organisation

Inhaltsverzeichnis

Introduction.- Model.- Existence of an SRPE and an SSPE.- Efficiency of an SRPE and an SSPE.- Afterword.

Über Autor(innen)

Milan Horniacek is currently an Associate Professor of Economics at the Institute of Public Policy and Economics of the Faculty of Social and Economic Sciences of the Comenius University in Bratislava. His research interests include non-cooperative game theory, industrial organization, antitrust policy and microeconomic theory. The analysis of equilibria in infinite horizon non-cooperative games that are immune to deviations by coalitions is the most important part of his research.