slides10 - Game Theory Steven Allen ECG 507 Fall 2005 1....

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Game Theory Steven Allen ECG 507 Fall 2005
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1. Oligopoly Management Challenges Strategic actions Rival behavior
Background image of page 2
2. Oligopoly Equilibrium in an Oligopolistic Market In perfect competition and monopoly the  producers did not have to consider a rival’s  response when choosing output and price. In oligopoly the producers must consider the  response of competitors when choosing  output and price.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3. Oligopoly Equilibrium in an Oligopolistic Market Defining Equilibrium Firms doing the best they can and have no  incentive to change their output or price All firms assume competitors are taking rival  decisions into account. Nash Equilibrium Each firm is doing the best it can given what its  competitors are doing.
Background image of page 4
4. Cartels Characteristics 1)  Explicit agreements to set output and  price 2) May not include all firms 3)  Most often international
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5. Cartels Conditions for success Potential of monopoly power--inelastic demand Ability to prevent cheating
Background image of page 6
6. Cartels OPEC Observations TD and D OPEC  is inelastic Non-OPEC supply is inelastic
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
7. Payoff Matrix for Cover Game Time Harry Potter Alito Harry Potter Alito Newsweek
Background image of page 8
8. Payoff Matrix for Cover Game Newsweek Time Harry Potter Alito Harry Potter Alito $35, $35 $70, $30 $15, $15 $30, $70
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
9. Dominant strategy
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/01/2008 for the course ECG 507 taught by Professor Allen during the Fall '05 term at N.C. State.

Page1 / 26

slides10 - Game Theory Steven Allen ECG 507 Fall 2005 1....

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online