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Cournot oligopoly interval games

  • Aymeric Lardon


    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS)

In this paper we consider cooperative Cournot oligopoly games. Following Chander and Tulkens (1997) we assume that firms react to a deviating coalition by choosing individual best reply strategies. Lardon (2009) shows that if the inverse demand function is not differentiable, it is not always possible to define a Cournot oligopoly TU(Transferable Utility)-game. In this paper, we prove that we can always specify a Cournot oligopoly interval game. Furthermore, we deal with the problem of the non-emptiness of two induced cores: the interval gamma-core and the standard gamma-core. To this end, we use a decision theory criterion, the Hurwicz criterion (Hurwicz 1951), that consists in combining, for any coalition, the worst and the better worths that it can obtain in its worth interval. The first result states that the interval gamma-core is non-empty if and only if the oligopoly TU-game associated with the better worth of every coalition in its worth interval admits a non-empty gamma-core. However, we show that even for a very simple oligopoly situation, this condition fails to be satisfied. The second result states that the standard gamma-core is non-empty if and only if the oligopoly TU- game associated with the worst worth of every coalition in its worth interval admits a nonempty gamma-core. Moreover, we give some properties on every individual profit function and every cost function under which this condition always holds, what substantially extends the gamma-core existence results in Lardon (2009).

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Paper provided by HAL in its series Post-Print with number halshs-00544044.

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Date of creation: 2010
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Publication status: Published in Working paper. 2010
Handle: RePEc:hal:journl:halshs-00544044
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