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Imperfections and Behavior in Economic Organizations analyzes the organization of economic decision making in a contemporary setting. The contributors focus on two important aspects of this analysis. First, they address the issue of imperfect or incomplete information and communication in economic organizations and consider imperfections arising from the interaction of the market organization with its environment. Second, the issue of cooperation in a competitive environment is thoroughly analyzed and alternative social trade organizations are designed to dissipate the allocation problems that arise in these situations

AbstractWe study a class of non-cooperative aggregative games—referred to as social purpose games—in which the payoffs depend separately on a player's own strategy (individual benefits) and on a function of the strategy profile which is common to all players (social benefits) weighted by an individual benefit parameter. This structure allows for an asymmetric assessment of a common social benefit across players. We show that these games have a weighted potential, and we investigate its properties. We investigate the payoff structure and the uniqueness of Nash equilibria and social optima. Furthermore, following the literature on partial cooperation, we investigate the leadership of a single coalition of cooperators, while the rest of players act as non-cooperative followers. In particular, we show that social purpose games admit the emergence of a stable coalition of cooperators for the subclass of strict social purpose games. As a particular application, we study a standard formulation of the tragedy of the commons. We show that there emerges a single stable coalition of cooperators that curbs the over-exploitation of the common resource.

AbstractWe investigate the stability of cooperation agreements, such as those agreed by cartels, among firms in a Cournot model of oligopolistic competition embedded in a multimarket contact setting. Our analysis considers a broad array of 64 potential market structural configurations under linear demand and quadratic production costs. We establish that for an appropriate range of parameter values there exists a unique core stable market configuration in which an identical two‐firm cartel is sustained in both markets. Our result highlights the significance of multimarket presence for cartel formation in light of the well‐known result from the single‐market setting where cartels are non‐profitable.

We consider a class of cooperative network games with transferable utilities in which players interact through a probabilistic network rather than a regular, deterministic network. In this class of wealth-generating situations we consider probabilistic extensions of the Myerson value and the position value. For the subclass of probabilistic network games in multilinear form, we establish characterizations of these values using an appropriate formulation of component balancedness. We show axiomatizations based on extensions of the well-accepted properties of equal bargaining power, balanced contributions, and balanced link contributions.