4. THE CORE OF A STRATEGIC GAME

Abstract

This paper introduces and studies the γ-core of a general strategic game. It shows that a prominent class of games admit nonempty γ-cores. It also shows that the γ-core payoff vectors (a cooperative solution concept) can be supported as equilibrium outcomes of a non-cooperative game and the grand coalition is the unique equilibrium outcome if and only if the γ-core is nonempty. As an application of this result, it shows that the γ-core of an oligopoly game is nonempty and, therefore, the oligopoly may become a monopoly unless prevented by law. JEL classification numbers: C71-73, D43, L13