oligopoly-ho

oligopoly-ho - Oligopoly Chapter 27 What is Oligopoly...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Oligopoly Chapter 27 What is Oligopoly? Oligopoly is a kind of market structure, like monopoly or perfect competition An oligopolistic industry is an industry consisting of a few firms (duopoly = two firms) Example industries: auto, operating systems, mp3/music players, airlines Questions How can we analyze an oligopolistic industry? How are the market prices and quantities determined? How does this impact welfare? How do we think about competition among oligopolists? Why might firms want to collude (form a cartel)? How can a cartel be sustained? We use Game Theory to Study Oligopoly With PC and monopoly market structures, we analyze a firm making an individual decision PC: very many firms, one firms actions do not impact others Monopoly: only one firm, no one else to impact However, oligopoly: each firms p , q decisions affect competitors profits Strategic interaction/interdependence = apply game theory Oligopoly models Considerations: Do firms compete on price or quantity? Do firms act sequentially (leader/followers) or simultaneously (equilibrium) Stackelberg models: quantity leadership Cournot equilibrium models: simultaneous choice quantity competition Bertrand equilibrium models: simultaneous choice price competition Oligopoly Today: Cournot model Compare to PC, monopoly Next time: Stackelberg model Bertrand model Cartels Example: comparing market structures...
View Full Document

This note was uploaded on 12/26/2011 for the course ECON 100B taught by Professor Kilenthong during the Fall '08 term at UCSB.

Page1 / 14

oligopoly-ho - Oligopoly Chapter 27 What is Oligopoly...

This preview shows document pages 1 - 7. Sign up to view the full document.

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