The (Price) Core of a Bertrand-Edgeworth Economy

In this paper, a solution concept from cooperative game theory is applied to a special kind of oligopolistic markets. Traditionally, oligopoly theory uses noncooperative game theory. The cooperative solution concept, the Price Core, has been specially developed for this paper. In contrast to the Cor...

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Bibliographic Details
Published in:Journal of economics (Vienna, Austria) Austria), 2003-01, Vol.78 (1), p.57-82
Main Author: Furth, Dave
Format: Article
Language:English
Subjects:
Commodities
Commodity prices
Competition
Consumer economics
Consumer goods
Consumer prices
Consumers
Consumption
Duopolies
Duopoly
Economic theory
Endowment
Equilibrium
Game theory
Market clearing prices
Market prices
Prices
Product differentiation
Reservation prices
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Summary:In this paper, a solution concept from cooperative game theory is applied to a special kind of oligopolistic markets. Traditionally, oligopoly theory uses noncooperative game theory. The cooperative solution concept, the Price Core, has been specially developed for this paper. In contrast to the Core, in the Price Core, different consumers may pay different prices for the same commodity. An example shows that the set of competitive allocations may be a proper subset of the Core and that the Core may be a proper subset of the Price Core.
ISSN:0931-8658
1617-7134
DOI:10.1007/s00712-002-0544-y