Questions about markets where the number of sellers is finite and larger than one.
Questions tagged [oligopoly]
40 questions
21
votes
4 answers
Why would a company sabotage its product's ability to be used for a particular purpose?
I saw in the news recently that NVIDIA has placed limits on the hash rate for mining Ethereum cryptocurrency. This is purportedly to get more GPUs into the hands of gamers instead of crypto miners.
What is the advantage to NVIDIA to doing this? …
Zaz
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8
votes
4 answers
Nash equilibrium of a Bertrand game with different marginal costs
Consider the following game of Bertrand (price competition):
There are two players, $1$ and $2$. Each has a publicly known marginal cost, $c_i$.
A strategy is a price, $p_i\in\mathbb{R}$.
Player $i$'s payoff (profit) is $\pi(p_i,p_j)=p_i-c_i$ if…
Ubiquitous
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8
votes
1 answer
A market correction for an industry which has had long-run negative externalities
Take a market where there have been long-run negative externalities. That is to say, the negative externalities have been in place long enough to have played a part in the investment decisions for all extant fixed capital.
Capital costs are a…
410 gone
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6
votes
0 answers
Dynamic Bertrand competition when players take turns
Consider the following game:
There are two players, $i\in\{1,2\}$
Time is discrete and runs to infinity during periods $t=\{1,2,\ldots\}$
At eat point in time, players have a price $p_i(t)\in\mathbb{R}_+$
Initialise the game with $p_1=p_2=p(0)$.
In…
Ubiquitous
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5
votes
3 answers
Clarification about Market Structure Oligopoly or Monopoly
As per the definition i found in the internet,
Oligopoly, in which a market is run by a small number of firms that together control the majority of the market share.
Monopoly, where there is only one provider of a product or service.
Consider…
Rajneesh Kumar Gobin
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5
votes
2 answers
Cournot oligopoly - first-order condition
I am reading an article that has this description of the first-order condition for a Cournot n-firm game:
Take $P(Q) = Q^{-1}$, $\pi_i(q_i, Q) = (Q^{-1} - c_i)q_i$.
Then the first-order condition for an interior profit-maximizing choice of $q_i$…
user219923
- 153
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4
votes
1 answer
Adjustment to equilibrium in Cournot model with 2 firms
In pg. 509, of Hal Varian's Intermediate Microeconomics Ch. 27, writer discusses the Cournot equilibrium.
In the figure, the reaction curve of firm 1 f1(y2) was steeper than firm 2 f2(y1).
When we started from the point (y1t, y2t), we were able to…
Dhruv Goel
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4
votes
1 answer
Equilibrium with substitute goods
I am attempting to solve the following problem
The demand functions for two substitute goods, the production cost of which equals $c_1$ and $c_2$,
are $q_1 = a_1 + b_{11}p_1 + b_{12}p_2$ and $q_2 = a_2 + b_{21}p_1 + b_{22}p_2$.
How can I find…
Michael
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4
votes
2 answers
Firm Concentration and Low Inflation
Inflation in the advanced economies since the financial crisis has been surprisingly low. Yet at the same time we’re told that the US economy is losing its dynamism in recent decades. This is reflected in often massive firm concentration and rising…
user17789
- 101
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3
votes
1 answer
Duopoly vs Collusion (quadratic costs)
Suppose there are 2 firms; Demand curve is given by $P=1400 - 5(q_1+q_2)$ and cost function is given by $C_i = 5q_i^2$.
For cournot, the best response function comes out to be $q_i=70 - 0.25q_j$ giving $q_1=q_2=56$ and $P=840$. Thus $\pi_1=\pi_2$=…
Shash
- 31
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3
votes
1 answer
Perfect Bayesian Equilibrium in a two stage game with incomplete information
I would like to solve a game where firms have private information about their own type, but only know the distribution of the other firm's type. They interact in two stages, where the strategies depend on each other. The first period is an…
unicoerner
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3
votes
2 answers
Are market structures on a spectrum?
So I understand that each market structure has their own characteristics, and that for instance Perfect Competition involves high competition, and I believe Monopolistic competition slightly less so, oligopoly even less, and monopoly virtually…
Wolff
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2
votes
1 answer
Mixed Cournot/Bertrand Duopoly
I am learning basic Oligopoly models.
I know that :
In Cournot model firms set output - output is the strategic variable.
In Bertrand model firms set prices - price is the strategic variable.
Simple problems I see are usually given demand/cost…
ChocolateU
- 29
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2
votes
2 answers
Stackelberg with 3 firms
I'm currently trying to solve the following problem:
Stackelberg with 3 firms Imagine there are three firms on a monopolistically competitive
market. The marginal cost of produc- tion in each firm is c. The
demand is $p(q) = A − Bq$. The…
Fozoro
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2
votes
1 answer
How do small firms survive in an oligopoly?
How do small firms survive in an oligopoly if large firms already dominate a huge amount of market share in the market? in terms of the supermarket industry between large supermarkets and small grocery stores around the country.
lookbehind
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