Coalitional Approaches to Collusive Agreements in Oligopoly Games


  • Sergio Currarini,

    1. University of Leicester
    2. Universita' di Venezia
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  • Marco A. Marini

    1. Sapienza Università di Roma
    2. CREI
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    • The first author acknowledges funding from the Italian Ministry of Education, University and Research and the Italian Ministry of Environment, Land and Sea under the GEMINA project. The second author acknowledges financial support from the Italian Ministry of Education, University and Research under the PRIN project ‘Climate changes in the Mediterranean area: scenarios, economic impacts, mitigation and innovation policies’. We wish to thank Francis Bloch, Michael Kopel, Jacquelin Morgan, Maria Luisa Petit, Kevin Roberts, Giorgio Rodano, Francesca Sanna Randaccio, Yair Tauman and an anonymous referee for their helpful comments and discussions on earlier drafts of this paper.


In this paper we review a number of coalitional solution concepts for the analysis of cartel and merger stability in oligopoly. We show that, although so far the industrial organization and the cooperative game theoretic literature have proceeded somehow independently on this topic, the two approaches are highly inter-connected. We show that different assumptions on the behaviour and on the timing of the coalitions of firms yield very different results on the associations of firms which are stable. We conclude by reviewing some recent extensions of the coalitional analysis to oligopolistic markets with heterogeneous firms and incomplete information.