Is it Harmful to Allow partial Cooperation ?
AbstractIn economics, politics and society, examples abound in economics, politics and society where agents can enter partial cooperation schemes, i.e., they can collude with a subset of agents. Several contributions devoted to specific settings have claimed that such partial cooperation actually worsens welfare compared to the no-cooperation situation. Our paper assesses this view by highlighting the forces that lead to such results. We find that the nature of strategic spillovers is central to determining whether partial cooperation is bad. Our propositions are then applied to various examples as industry wage bargaining or local public goods. Copyright 2000 by The editors of the Scandinavian Journal of Economics.
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Bibliographic InfoPaper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 99-39.
Date of creation: 1999
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