oligopoly2-ho_003

oligopoly2-ho_003 - Bertrand Stackelberg Cartels...

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Unformatted text preview: Bertrand Stackelberg Cartels Oligopoly (contd.) Chapter 27 Bertrand Stackelberg Cartels Midterm 2 • Bring pencil/pen, bluebook, pink scantron • 8 MC questions, like last time • Important skills: • Find monopoly p , q • Analyze effects of policy (e.g. tax, subsidy, price ceiling) on monopoly • Max profits using price discrimination (lecture and especially workouts 25.5-8) • Analyze duopoly (Cournot, Bertrand, Stackelberg, collusion) Bertrand Stackelberg Cartels Oligopoly 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 Bertrand Stackelberg Cartels Today • Price competition (Bertrand duopoly) • More quantity competition • Stackelberg Duopoly • Cartels/collusion Bertrand Stackelberg Cartels Bertrand Duopoly: price competition • Firms compete on price • No clear leader, follower so firms effectively choose p simultaneously • Take the other firm’s price as given • Market demand determines equilibrium output • Both choose same price: divide demand evenly • One sets lower price: that firm captures entire market Bertrand...
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oligopoly2-ho_003 - Bertrand Stackelberg Cartels...

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