Chapter 17 - Oligopoly

Collusion

________: an agreement among firms in a market about quantities to produce or prices to charge.

Nash

________ equilibrium: a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen.

predatory pricing

In ________, the price has to be below the average variable cost to drive other people out of the market.

Tit for tat

________ is when a player begins cooperating but then does whatever the player did last time.

Self interest

________ pushes oligopolies towards competition, despite acting similar to monopolies.

Prisoners' Dilemma

The ________ is similar to an oligopolist reaching an outcome in a monopoly.

Game theory

________: the study of how people behave in strategic situations.

Cartel

________: a group of firms acting in unison.

duopoly

A(n) ________ is an oligopoly with two members.

Oligopoly

________: a market structure in which only a few sellers offer similar or identical products.

noncooperative equilibrium

The ________ is typically bad for the welfare of society.

Clayton Act

The ________ (1914) strengthened antitrust laws.

output effect

The ________ tells us that since the price is higher than the marginal cost, selling an extra gallon of water at the going price will raise profit.

Prisoners' dilemma

________: a particular "game "between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial.