The (Price) Core of a Bertrand–Edgeworth Economy

In this paper, a solution concept from cooperative game theory is applied to a special kind of oligopolistic markets. Traditionally, oligopoly theory uses non-cooperative game theory. The cooperative solution concept, the Price Core, has been specially developed for this paper. In contrast to the Core, in the Price Core, different consumers may pay different prices for the same commodity. An example shows that the set of competitive allocations may be a proper subset of the Core and that the Core may be a proper subset of the Price Core.