426test2
Terms
undefined, object
copy deck
- mutual interdependence
- each firm knows that its decisions affect what other firms do
- oligopoly models
-
cournot
bertrand
stackelberg - cournot conjecture
- each firm assumes that its rivals will not change their output when it changes its own
- isoprofit curve
- all the combinations of q1 and q2 that result in the same profits
- bertrand conjecture
- each firm assumes taht rivfals will not adjust their prices when it changes its own
- bertrand equilibrium
- P=MC
- cournot equilibrium
- mutual best responses
- stackelberg leader
- is aware of conjectures of other firm and uses that info to decide its own output
- stackelberg follower
- uses cournot conjecture
- tacit collusion
- acheiving collusive outcome without an explicit agreement- only in oligopoly industries
- Turner's view
- oligopolists won't cheat b/c they know it makes no sense to cheat- tacit collusion shouldn't be prosecuted
- concious parallelism
- recognition of strong mutual interdependence in oligopolies
- Posner's view
- tacit collusion should be prosecuted- time lag between cheating and detection makes it profitable
- predatory pricing
- pricing below cost with the intention of driving rivals out of the market- SR loss to get monopoly profits
- Areeda and Turner
- makes no economic sense to price below SR MC- hard to measure- use AVC instead
- consumer surplus approach (Shapiro Rule)
- a procompetitive patent settlement should not lead to lower consumer surplus than on going litigation
- patent pools
- overlapping patents
- technology tying
- conditioning the sale of one product on the sale of another- Microsoft
- standard setting
- get board to pass a standard and then tell people you have the patent
- reverse payments
- patent holder pays nonpatent holder to stay off the market
- work around
- a product that doesn't infringe