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A Note on Stable Cartels

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  • Mao, Liang

Abstract

In non-cooperative open membership cartel formation games, it is usually assumed that cartel members will maximize their joint payoffs. Through an example, this note shows that this assumption is problematic, because it imposes some unnecessary restrictions on cartel members' actions. We recommend that the cartel agreement should be endogenously determined in future studies.

Suggested Citation

  • Mao, Liang, 2017. "A Note on Stable Cartels," MPRA Paper 83982, University Library of Munich, Germany, revised 18 Jan 2018.
    • Handle: RePEc:pra:mprapa:83982
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    References listed on IDEAS

    as
    1. Michael Finus & Alejandro Caparrós (ed.), 2015. "Game Theory and International Environmental Cooperation," Books, Edward Elgar Publishing, number 15345.
    2. Miller, Steve & Nkuiya, Bruno, 2016. "Coalition formation in fisheries with potential regime shift," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 189-207.
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    4. Mao, Liang, 2017. "Designing International Environmental Agreements under Participation Uncertainty," MPRA Paper 86248, University Library of Munich, Germany.
    5. Michael L. Katz, 1986. "An Analysis of Cooperative Research and Development," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 527-543, Winter.
    6. Effrosyni Diamantoudi, 2005. "Stable cartels revisited," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 907-921, November.
    7. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    8. Carlo Carraro (ed.), 2003. "The Endogenous Formation of Economic Coalitions," Books, Edward Elgar Publishing, number 2999.
    9. Mao, Liang, 2017. "Designing International Environmental Agreements under Participation Uncertainty," MPRA Paper 79145, University Library of Munich, Germany.
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    11. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    cartel formation; stable cartel; self-enforcing agreement;
    All these keywords.

    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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