1. If average cost is decreasing, then it must be the case that
D. Marginal cost is less than average cost
2. Why does the distance between curves II and III get smaller as quantity
increases?
B. Because average fixed cost is declining
3. In a perfectly c
Commodity Bundling and Tie-In Sales
Chapter 8
Industrial Organization
ECO 326
Fall 2014
Dongwook Kang
Stony Brook University
Nov. 03, 2014
Industrial Organization (ECO 326)
Chapter 8
Nov. 03, 2014
1 / 12
Introduction
A rm with monopoly power in more than
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Price-Fixing and
Repeated Games
Chapter 14: Price-fixing and
Repeated Games
1
Collusion and cartels
What is a cartel?
attempt to enforce market discipline and reduce competition
between a group of suppliers
cartel members agree to coordinate their acti
Dynamic Games and First and
Second Movers
Chapter 11: Dynamic Games
1
Introduction
In a wide variety of markets firms compete sequentially
one firm makes a move
new product
advertising
second firms sees this move and responds
These are dynamic games
Lecture 9: Product Dierentiation
Instructor: Yiyi Zhou
Eco 326: Industrial Organization
Product Dierentiation
I
In homogeneous goods markets, price competition leads to
perfectly competitive outcome, even with two firms
I
Price competition with dierentiat
Lecture 7: Incumbent Advantage. Entry
Deterrence and Accommodation
Instructor: Yiyi Zhou
Stony Brook University
ECO 326: Industrial Organization
First-Mover Advantage
I
It is often argued that early entrants to a market have an
advantage over later entran
ECO 326: Industrial Organization
Department of Economics, Stony Brook University
Semester: Spring 2016
Class Time: Monday and Wednesday 4:00PM 5:20PM
Class Room: Frey Hall 317
Instructor: Yiyi Zhou
Email: yiyi.zhou@stonybrook.edu
Office: N625, Social & Be
Lecture 8: Price Discrimination
Instructor: Yiyi Zhou
Stony Brook University
ECO 326: Industrial Organization
Price Discrimination
I
Up to now, we assumed that a monopolist produces a single
good and sells it at a uniform price (per unit)
I
Consider cases
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Bellman equation is a dynamic programming equation that writes the value of a decision
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1Eco 326 Homework
Bellman equation is a dynamic programming equation that writes the value of a decision
problem at a particular point in time regarding the payoff from some preliminary choices and the
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Eco 326 Homework
Bellman equation is a dynamic programming equation that writes the value of a decision
problem at a particular point in time regarding the payoff from some preliminary choices and the
value of the outstanding decision problem that results
ECON 326
Page 1 of 2
Stony Brook University
Fall 2016
Name:
Industrial Organization
Practice Problems II
Infinitely Repeated Cournot and Collusion
Suppose there are two identical firms engaged in quantity competition (Cournot competition). Every period ea
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