%0 Journal Article
%T Firms’ Coalitions, Demand Systems and Asymmetric Prices
%A Armando Jose Garcia Pires
%A Frode Skjeret
%J Theoretical Economics Letters
%P 779-787
%@ 2162-2086
%D 2025
%I Scientific Research Publishing
%R 10.4236/tel.2025.153043
%X We extend Deneckere and Davidson’s model on firms’ incentives to form coalitions to predict which firms are more likely to enter a coalition. In Deneckere and Davidson, all firms have the same incentives to enter a coalition because they are all symmetric and therefore choose symmetric prices. We modify their demand specification to include different cross-price elasticities. With this, we can generate market equilibria where firms have different prices, and therefore different incentives to enter a coalition. Our modified model can inform the construction and estimation of empirical models of coalitions and price formation.
%K Firms&#8217
%K Coalitions
%K Partial Cartels
%K Mergers and Acquisitions
%K Joint Ventures
%K Demand Systems
%K Asymmetric Prices
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=143556