The extent to which a single manufacturer or a small number of industries controls price setting and production decisions in an industry

Concentration of the four industries [top four]

Weighted market share of all players participating in the HHI market

Factors: Competition from other companies, legal arbitration

A company's business decisions depend on competitors' business practices

collude

Producers produce differentiated products and have a certain degree of market control power

Long-term free entry and exit industry

Game and Strategy Interaction

Improve economic welfare

Two or more players choose ways to jointly influence each action or strategy

Key: Build credibility and align with the motivations of the game

Useful tool to illustrate the interaction between two businesses or two people

Base your strategy on the assumption that your opponent will act in his or her best interests

No matter what strategies other players adopt, this player's strategy is always the best

Assuming that each player chooses the optimal strategy and assuming that it will not change, the result must be a Nash equilibrium

Increase the quantity and quality of information and ensure rules

Sherman Act 1890

Clayton Law

Federal Trade Commission Act

antitrust laws

What is illegal is the conduct itself, not the structure [an agreement between competing firms to lock in prices]