Exam 16: Oligopoly Games and Strategy

Australian -There are two can companies, Australian and National, which have entered into a collusive agreement. The payoff matrix of economic profits is above. If National is able to cheat on the agreement but Australian complies with the agreement, what amount of economic profit is made by National?

Asus -Dell and Asus must decide whether to lower their prices, based on the potential economic profits shown in the payoff matrix above (in millions of dollars). In the Nash equilibrium,

Oscar -Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix above gives the economic profit that each firm can make. If Felix cheats on the agreement but Oscar complies, Felix makes an economic profit of _______ and Oscar makes an economic profit of _______.

If a duopolists' collusive price- fixing game can be played repeatedly,

A monopolistically competitive firm is like an oligopolistic firm insofar as

An oligopoly is a market structure in which there are

The maximum total economic profit that can be made by colluding duopolists

Player A -The problem for the prisoners in the prisoners' dilemma game in the above table is that

A firm might be tempted to cheat on a collusive price- fixing agreement by setting a _______ price and producing _______ than agreed upon.

Game theory is most useful for analysing

A market with one or a small number of firms but no barriers to entry is known as

Jane -The payoff matrix of economic profits above displays the possible outcomes for Bob and Jane who are involved in a game of whether or not to advertise. After each player chooses his or her best strategy and sees the result,

The prisoners' dilemma has an equilibrium that is

Big W -Refer to the payoffs in the table above. Big W and Kmart must decide whether to lower their prices based on the profits shown in the table. This game has

Oscar -Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix above shows the economic profit that each firm can make. If the game is played only once, then _______.

In oligopolistic markets,

When only a small number of producers compete with each other, it is a defining characteristic of

Limit pricing is a strategy used by a firm to

Which of the following is a distinguishing characteristic of oligopoly?

A collusive agreement between two duopolists is similar to the prisoners' dilemma because in both games