Library of American University of Madaba
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Horniacek, Milan.
Cooperation and Efficiency in Markets [electronic resource] / by Milan Horniacek. - VII, 92p. online resource. - Lecture Notes in Economics and Mathematical Systems, 649 0075-8442 ; .
Introduction -- Model -- Existence of an SRPE and an SSPE -- Efficiency of an SRPE and an SSPE -- Afterword.
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.
9783642197635
Economics.
Mathematics.
Economic policy.
Industrial organization (Economic theory).
Microeconomics.
Economics, Mathematical.
Economics/Management Science.
Game Theory/Mathematical Methods.
Industrial Organization.
Economic Policy.
Economic Theory.
Microeconomics.
Game Theory, Economics, Social and Behav. Sciences.
HB144
330.0151 330
Cooperation and Efficiency in Markets [electronic resource] / by Milan Horniacek. - VII, 92p. online resource. - Lecture Notes in Economics and Mathematical Systems, 649 0075-8442 ; .
Introduction -- Model -- Existence of an SRPE and an SSPE -- Efficiency of an SRPE and an SSPE -- Afterword.
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.
9783642197635
Economics.
Mathematics.
Economic policy.
Industrial organization (Economic theory).
Microeconomics.
Economics, Mathematical.
Economics/Management Science.
Game Theory/Mathematical Methods.
Industrial Organization.
Economic Policy.
Economic Theory.
Microeconomics.
Game Theory, Economics, Social and Behav. Sciences.
HB144
330.0151 330