管理经济学（英文）Ch09 Market Structure Oligopoly.pptVIP

Chapter 9 Market Structure: Oligopoly Oligopoly A market structure characterized by competition among a small number of large firms that have market power, but that must take their rivals’ actions into consideration when developing their competitive strategies Characteristicsof an Oligopoly Firms have market power derived from barriers to entry However, a small number of firms compete with each other Each firm doesn’t have to consider the actions of other firms, thus, behavior is interdependent Noncooperative Oligopoly Models Assumes that firms pursue profit-maximizing strategies based on assumptions about rivals’ behavior and the impact of this behavior on the given firm’s strategies Kinked Demand Curve Model Assumes that a firm is faced with two demand curves, assuming that other firms will not match price increases but will match price decreases If the firm considers raising the price above P1, its quantity demanded will depend upon the behavior of rival firms Kinked Demand Curve Model Assumes that managers will inflict maximum damage on other firms Implies oligopoly prices tend to be “sticky” and not change as they would in other market structures Does not explain why price P1 exists initially Kinked Demand Curve Game Theory Models Mathematically analyzes situations in which players make various strategic moves and have different outcomes or payoffs associated with those moves Dominant strategy: results in best outcome to a given player Prisoner’s dilemma: occurs when all players choose their dominant strategies and end up worse off than if they had coordinated their strategies Nash Equilibrium Strategies for which all players are choosing their best strategy, given actions of other players Proves useful when there is only one unique equilibrium in the game There may be multiple Nash equilibrium Strategic Entry Deterrence Policies that prevent rivals from entering the market Limit pricing: charging a price lower than the profit-maximizing price Predator