Degrees of Competition- Aspects
- # of firms
- Product homogeneity
- Ease of entry/exit
- Form of competition
- Info Availability
Oligopoly Conditions- Few Firms - High Concentration
- Homo- or Hetero-genous
- Barriers to Entry Likely
- Economies of Scale
- High costs of entry
- Standards or Patents
- Brand
Oligopoly “Games” or Models- Cartel / Collusion
- Informal, Tacit Collusion
- Price Leadership / Signalling
- Dominant Firms
- Duopoly
-
Game Theory Analysis
Game Theory- Strategic Thinking:
- What I choose depends on what you choose
- What you choose depends on what you think I will choose
- So what I choose depends on what I think you think I will choose
- But what you choose depends on what you think I think you think I will choose
- ……………
Oligopoly Performance- Highly Variable Results
- Usually Higher Price
- Likely Slower Innovation
- Higher Profits