10-18-07 - with potential entrance(enter or not game...

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10-18-07 Econ Repeated games (people become more cooperative.) (Do games over and over) - Tit-for-Tat strategy – do exactly what my opponent did. (if they cheat then I will cheat) o In real life it is hard to figure out who cheated and how to punish them. - Sequential Game (games in which time matters) o We might have 2 match equilibriums. o Timing reactor exists. (like decision tree) (Usually one person chooses and the other player makes decision.) We call it first move advantage. Oligopoly – contestable market - Market in which firms enter and leave so easily that firms in the market face competition
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Unformatted text preview: with potential entrance. (enter or not game) Monopolistic Competition (location is one of reason for price)-Just like in Perfect competition, large number of firms freely enters and exits. -But in contest o Degree of production differentiation o Firms compete in price, quantity, and marketing o Firms in monopolistic competition market to set price o Each firm will face its own demand curve-Price and output decision o MR=MC and tract up to Demand and compare to AC. o Just like Perfect competition, economic profit in the long run will be zero....
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This note was uploaded on 12/02/2009 for the course ECON econ taught by Professor For got during the Spring '09 term at UCSD.

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