Is it harmful to allow partial cooperation?

In economics, politics and society examples abound in economics, politics a nd society where agents can enter partial cooperation schemes, i.e., they c an collude with a subset of agents. Several contributions devoted to specif ic settings have claimed that such partial cooperation actually worsens wel fare compared to the no-cooperation situation. Our paper assesses this view by highlighting the forces that lead to such results. We find that the nat ure of strategic spillovers is central to determining whether partial coope ration is bad. Our propositions are then applied to various examples as ind ustry wage bargaining or local public goods.