ECON 1050 Chapter Notes - Chapter 15: Game Theory, Monopoly Profit, Nash Equilibrium
20 Dec 2016
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Document Summary
Oligopoly: a market structure in which a small number of firms compete. Natural or legal barriers prevent the entry of new firms. Duopoly: an oligopoly market in which two producers of a good or service compete. Due to barriers to entry, oligopoly consists of a small number of firms, each which large market share. With a small number of firms, each firm(cid:495)s actions effects the others, they are. Cartel: a group of firms acting together colluding to limit output, raise the price, and increase economic profit interdependent. Oligopoly is identified by looking at the herfindahl-hirschman index. Game theory: a set of tools for studying strategic behaviour behaviour that takes into account the expected behaviour of others and the recognition of mutual interdependence. Strategies: all the possible actions of each player in a game. Payoff matrix: a table that shows the payoffs for every possible action by each player for every possible action by each other player.
