Strategic Interaction, Competition, Cooperation and Observability

Both the Cournot and the Bertrand oligopoly model make an important distinction between buyers and sellers. Sellers act as strategic players and are able to influence prices, buyers act non-strategically and are just represented by a demand function. This dissertation looks at situations without distinctions between buyers and sellers. Chapter two analyzes strategic market games à la Shapley and Shubik (Journal of Political Economy, 1977) with sequential moves. Usually, strategic market games model strategic exchange economies as noncooperative games with simultaneous moves. Simultaneous moves strategic market games might exhibit a strange property: an increase in the number of sellers (competition) may be beneficial for all sellers. With sequential moves the counterintuitive result does not hold. Chapter three studies the effects of competition on bargaining power in repeated bilateral negotiations. In particular implicit collusion in a model of bargaining is modelled. Implicit collusion is supported by price war equilibria sustaining implicit collusion in repeated oligopoly models. Chapter four analyses the influence of social structures in form of a communication network on cooperation in an infinitely repeated Prisoner's dilemma with changing partners and random matching. A huge network is beneficial and it is optimal if all network members have close contacts to all other network members. With noisy communication it is not optimal anymore to entertain close contacts to all network members. Moreover, as the number of network members gets large, cooperation fails.