Extended Market Games in Technology Sectors: Microchip Manufacturing Case Study

This paper extends previous research on one-commodity market games by applying the cooperative approach to technology-intensive sectors, with a specific focus on the microchip manufacturing industry. We introduce two new theoretical results that enhance our understanding of price stability in oligopolistic markets characterized by high entry barriers and substantial R&D investments. First, we establish the existence of a modified pseudo-core under weakened assumptions about demand elasticity. Second, we demonstrate the convergence of coalition-based pricing strategies in dynamic market conditions. These theoretical advances are validated through a case study of the semiconductor industry, where several manufacturers trade standardized microchips while negotiating prices among coalitions. The empirical findings suggest that cooperative game theory provides valuable insights into pricing stability in technology markets, especially during periods of supply chain disruption