Cooperative oligopoly games: a probabilistic approach

Abstract: We analyze the core of a cooperative Cournot game. We assume that when contemplating a deviation, the members of a coalition assign positive probability over all possible coalition structures that the non-members can form. We show that when the number of firms in the market is sufficiently large then the core of the underlying cooperative game is non-empty. Moreover, we show that the core of our game is a subset of the \gamma - core.