review notes 14

review notes 14 - may be homogeneous or differentiated. The...

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Chapter 14 Oligopoly Concepts, terms, and definitions to know: market structure cartel dominant strategy game theory oligopoly industry concentration Oligopoly This is an industry dominated by a few firms that, because of their sizes, are large enough to influence the market price . In some oligopoly markets products are differentiated; in others they are nearly homogeneous. Some markets have only a few firms (a concentrated industry), whereas others have many firms but a few large ones dominate. A complex interdependence exists among firms in these industries; the behavior of any one firm depends on the reactions it expects from the others. Oligopoly is a market structure characterized by a few dominant firms . Products
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Unformatted text preview: may be homogeneous or differentiated. The firms are interdependent: each must take into account the others reactions to any change in strategy. Oligopoly models include a behavioral assumption about how the firms react to each other. game theory Analyzes oligopolistic behavior as a complex series of strategic moves and reactive countermoves among rival firms. In game theory, firms are assumed to anticipate rival reactions. dominant strategy In game theory, a strategy that is best no matter what the opposition does. prisoners dilemma A game in which the players are prevented from cooperating and in which each has a dominant strategy that leaves them bothworse off than if they could cooperate. 1...
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