Micro A2 - Oligopoly Flashcards
1
Q
Characteristics of a oligopoly
A
- High barriers to entry/exit
- high concentration ratio (few firms)
- interdependence of firms
- product differentiation (branding features etc)
- non - price competition
2
Q
How to calculate the n-firm concentration ration
A
3
Q
The significance of the n-firm concentration ration
A
4
Q
Reasons for collusive behaviour
A
5
Q
Reasons for non-collusive behaviour
A
6
Q
Overt collusion
A
7
Q
Tactic collusion
A
8
Q
Cartels (collusion)
A
9
Q
Price leadership
A
10
Q
Game theory
A
predicting the outcome of the games of strategy, in which the “players” (two or more businesses competing in a market) have incomplete information about the other’s intentions.
11
Q
The prisoners dilemma (game theory)
A
- A game that illustrates why it is difficult to cooperate, even when it is in the best interest for both parties.
- both parties (businesses) are assumed to select their own dominant strategies for short-sighted personal gain / self-interest
- eventually they will reach an equilibrium in which they are both worse off than they would have been, if they agree to select an alternative (non-dominant) strategy.
12
Q
Price wars
A
13
Q
Predatory pricing
A
14
Q
Limit pricing
A
15
Q
Types of non-price competition
A
