final Flashcards
game theory
a theoretical framework to conceive social situations among competing players. The intention of game theory is to produce optimal decision-making of independent and competing actors in a strategic setting.
dominat strategy
a player makes the same choice no matter what the other player chooses
explicit collusion
occurs when companies officially agree to work together, usually to maximize joint profits
How does collusion make firms better off?
The firms can act as a single entity, like a monopoly.
collusion
An agreement among firms to charge the same price or otherwise not to compete.
cartel
A group of firms that collude by agreeing to restrict output to increase prices and profits.
nash equilibrium
A situation in which each firm chooses the best strategy, given the strategies chosen by other firms.
price discrimination is when
firms charge a higher price for a product when it is first introduced and a lower price later.
firms charge a higher price to customers and a lower price to consumers .
firms charge each consumer a different price equal to that consumer’s willingness to pay.
Price discrimination
a sales strategy of selling the same product or service to different customers for different prices.
inflation
rate prices are rising to
disinflation
inflation rate has come down
deflation
price is actually falling
a public good has which characteristic
non rival and non excludable
