Journal Article

Collusion, Exclusion, and Inclusion in Random-Order Bargaining

Ilya Segal

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 70, issue 2, pages 439-460
Published in print April 2003 | ISSN: 0034-6527
Published online April 2003 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/1467-937X.00251
Collusion, Exclusion, and Inclusion in Random-Order Bargaining

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This paper examines the profitability of three types of integration in a cooperative game solved by a random-order value (e.g. the Shapley value). Collusion between players i and j is a contract merging their resources in the hands of one of them, say i. This contract can be represented as a combination of exclusion, which lets i exclude j's resource but not use it himself, and inclusion, which lets i use j's resource but not exclude j from it. This representation yields a third-difference condition on the characteristic function that determines the profitability of collusion, generalizing existing results for specific games. Namely, collusion is profitable [unprofitable] when the complementarity of the colluding players is reduced [increased] by other players.

Journal Article.  0 words. 

Subjects: Economics

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