Stability likelihood of coalitions in a two-stage cartel game: An estimation method

N.J. Olieman, E.M.T. Hendrix

Research output: Contribution to journalArticleAcademicpeer-review

10 Citations (Scopus)

Abstract

Existing formulations of a cartel game aim at finding stable coalitions, i.e. a coalition is labelled stable or not stable. Uncertainty about the underlying structure and/or parameter values gives rise to sensitivity or uncertainty analysis. In this paper we follow a probabilistic robustness concept: What is the probability a product, design or policy really fulfils the requirements or properties it is expected to. Following this idea, we introduce the concept of stability likelihood: What is the probability a coalition can be labelled as stable. Methods are described based on Monte Carlo Simulation and Directional Simulation to estimate such a probability and we illustrate the performance for several cases
Original languageEnglish
Pages (from-to)333-348
JournalEuropean Journal of Operational Research
Volume174
Issue number1
DOIs
Publication statusPublished - 2006

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