ECON 101 Lecture Notes - Lecture 21: Nash Equilibrium, Strategic Dominance, Repeated Game
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ECON 101 Full Course Notes
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Competition among firms who have some market power. Decisions made by each firm has an impact on the market. Each firm must consider the actions of the other firms in the industry. Industry with a small number of producers. Barriers to entry exist, just not as strong as with monopoly. Each firm makes decisions about output and price without consulting each other. Two or more firms acting together to set prices or quantity rather than competing. Firms acting together as if a monopoly. Monopoly profits are the highest profits possible in an industry. Possible courses of action for each player. Reward received by a player in a game (profits) Each player attempts to maximize their individual payoffs. Occurs when, holding the strategies of all other players constant, no player can obtain a higher payoff by choosing a different strategy. Given what the other players are currently doing, no player can gain by. Example 1: advertising game altering their own strategy.
