Cooperation and Efficiency in Markets
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 equ
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further volumes: http://www.springer.com/series/300
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Milan Horniaˇcek
Cooperation and Efficiency in Markets
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Milan Horniaˇcek Comenius University Faculty of Social and Economic Sciences Institute of Public Policy and Economics Mlynské luhy 4 82005 Bratislava Slovakia [email protected]
ISSN 0075-8442 ISBN 978-3-642-19762-8 e-ISBN 978-3-642-19763-5 DOI 10.1007/978-3-642-19763-5 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2011929346 c Springer-Verlag Berlin Heidelberg 2011 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: eStudio Calamar S.L. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)
Preface
This book is a result of my research in game theory and oligopoly theory. It has also been influenced by my teaching experiences. Countable infinite repetition of strategic form noncooperative games with discounting of future payoffs has been the focus of my research interest for about 20 years. In most of my work, I have tried to analyze solution concepts that also take into account the deviations by the coalitions of players (if possible, by all coalitions). The emergence of cooperation between patient players, who are forced to be competitors in a static setting (or even in a dynamic setting with a finite horizon), is a fascinating phenomenon from both the intellectual and human points of view. From the intellectual point of view, the development of strategy profiles that are immune to the deviations by coalitions is a challenging and interesting work. From the human point of view, it is nice to know that – when there is a sufficiently long shadow of the future – selfish behavior, aimed at prospering at the expense of another individual, need not be rational. It is a good news that when all players agree on a cooperation scheme, no one can gain by distorting it unilaterally. If it turns out that no coalition can make any of its members better off without making another member worse off by distorting a cooperation scheme, it is a pleasant news. My sensitivity to the human side of results on infinite repeated games increased in last three years during which I was teaching the course “Models of competition
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