This paper argues that the sign of external effects of coalition formation provides a useful organizing principle in examining economic coalitions. In many interesting economic games, coalition formation creates either negativee externalities or positive externalities for nonmembers. Examples of...

This paper develops a three stage oligopoly game for R&D cooperation, R&D expenditure and product market competition. In the first stage, firms decide whether or not to conduct R&D in cooperation with other firms. In the second stage the level of R&D investment is determined. Finally, firms...