MindMap Gallery Microeconomics Oligopoly and Monopolistic Competition Mind Map
An article about microeconomics, oligopoly and monopolistic competition mind map, compiled by Samuelson in Chapter 10, including basic content, behavior of imperfect competitors, game theory, public policy, etc.
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This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
This is a mind map about plant asexual reproduction, and its main contents include: concept, spore reproduction, vegetative reproduction, tissue culture, and buds. The summary is comprehensive and meticulous, suitable as review materials.
This is a mind map about the reproductive development of animals, and its main contents include: insects, frogs, birds, sexual reproduction, and asexual reproduction. The summary is comprehensive and meticulous, suitable as review materials.
Oligopoly and monopolistic competition
A. Behavior of imperfect competitors
The trade-off of market power
market power
The extent to which a single manufacturer or a small number of industries controls price setting and production decisions in an industry
measure of concentration
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
The essence of imperfect competition
Cost to enter the fort
strategic interaction
A company's business decisions depend on competitors' business practices
imperfect competition theory
Collusion with oligarchs
collude
Two or more companies jointly determine output and prices, divide the market or formulate policies between them
Seeking a collusive oligopoly equilibrium - equivalent to an oligopoly
mutual profit maximization, interdependence
Cartel: A group of independent businesses that produce similar products band together to raise prices and limit output.
Monopolistic Competition
Producers produce differentiated products and have a certain degree of market control power
Long-term free entry and exit industry
P>MC, MR=MC, economic profit=0 [AC=P]
oligarchic struggle
Game and Strategy Interaction
price discrimination
The same product is sold to different customers at different prices
Improve economic welfare
game theory
Definitions and concepts
game
Two or more players choose ways to jointly influence each action or strategy
Key: Build credibility and align with the motivations of the game
Return Matrix/Payment Matrix
Useful tool to illustrate the interaction between two businesses or two people
Pricing Strategy
dynamic price reduction
Strategy selection
guiding ideology
Base your strategy on the assumption that your opponent will act in his or her best interests
dominant strategy
No matter what strategies other players adopt, this player's strategy is always the best
When both are used - dominant equilibrium
Nash Equilibrium [Confrontational Equilibrium, Non-Equilibrium Equilibrium]
Assuming that each player chooses the optimal strategy and assuming that it will not change, the result must be a Nash equilibrium
public policy
static costs of imperfect competition
Higher prices and the cost of insufficient output
Regulation and calming of economic activity
Prevent the abuse of market power by oligopolies and monopolies, and significantly raise prices to earn profits from inelastic demand
Correction of information asymmetry
Increase the quantity and quality of information and ensure rules
Face up to externalities
Antitrust Laws and Laws
regulatory framework
Sherman Act 1890
Prohibition of "trade contracts", "monopoly", etc.
Clayton Law
Outlaw tying contracts, price discrimination and exclusive dealing, mutual directors and mergers are illegal
Federal Trade Commission Act
Strength of law enforcement and enforcement of unfair practices
antitrust laws
Committed to improving efficiency
Fundamental Issues: Behavior and Structure
What is illegal is the conduct itself, not the structure [an agreement between competing firms to lock in prices]