In a Cournot duopoly where firms incur a fixed cost for serving each market, collusion is easier to sustain with production quotas if the fixed cost is small enough, and with market sharing agreements if it is large enough.

This paper studies bilateral insurance schemes across networks of individuals. While transfers are based on social norms, individuals must have the incentive to comply. We investigate the structure of self-enforcing insurance networks. Network links play two distinct and possibly conflictual...

This paper provides a selective survey of recent approaches to coalition and network formation in industrial organization, and offers a unified framework in which the different approaches can be compared. We focus on two extreme forms of cooperation--collusive agreements and cost-reducing...

This paper analyses the formation of trading groups in a bilateral market with strategic traders. A trading structure (a partition of the set of traders into trading groups) is strongly stable if no coalition of traders can deviate and increase the utility of some of its members while making no...

This paper studies a strategic market game where agents fragment their bids on different markets. Simple conditions for existence of an interior equilibrium point are provided. In equilibrium, all agents are active on the same markets and prices are identical across markets, so that all...

This paper analyzes secession and group formation in the general model of contests due to Esteban and Ray (1999). This model encompasses as special cases rent seeking contests and policy conflicts, where agents lobby over the choice of a policy in a one-dimensional policy space. We show that in...