Lecture 8: pricing and Strategy

Advanced Micro TheoryMSc.EnviNatResEcon.

1/2006Charit Tingsabadh

Chapter 13

Oligopoly and Monopolistic Competition

Table 13.1 Properties of Monopoly, Oligopoly, Monopolistic Competition,

and Competition

Table 13.2 Profit Matrix for a Quantity-Setting Game

Figure 13.1 Competition Versus Cartel

Figure 13.2 American Airlines’ Profit-Maximizing Output

Figure 13.2a American Airlines’ Profit-Maximizing

Output

Figure 13.2b American Airlines’ Profit-Maximizing

Output

Figure 13.3 American and United’s Best-Response Curves

Figure 13.4 Duopoly Equilibria

Figure 13.4a Duopoly Equilibria

Figure 13.4b Duopoly Equilibria

Table 13.3 Cournot Equilibrium Varies with the Number of Firms

Figure 13.5 Stackelberg Game Tree

Figure 13.6 Stackelberg Equilibrium

Figure 13.7 Effects of a

Government Subsidy on a

Cournot Equilibrium

Figure 13.7a Effects of a Government Subsidy on a Cournot

Equilibrium

Figure 13.7b Effects of a Government Subsidy on a Cournot

Equilibrium

Table 13.4 Effects of a Subsidy Given to United Airlines

Page 458 Solved Problem 13.1

Table 13.5 Comparison of Airline Market Structures

Figure 13.8 Monopolistically Competitive Equilibrium

Figure 13.9 Monopolistic Competition Among Airlines

Figure 13.9a Monopolistic Competition Among Airlines

Figure 13.9b Monopolistic Competition Among Airlines

Figure 13.10 Bertrand Equilibrium with Identical Products

Figure 13.11 Bertrand Equilibrium with Differentiated Products

Chapter 14

Strategy

Table 14.1 Simultaneous Entry Game

Solved Problem 14.1 (Page 483)

Figure 14.1 Whether an Incumbent Pays to Prevent

Entry

Figure 14.2 Noncredible Threat

Figure 14.3 Game Trees for the Deterred Entry and Stackelberg

Equilibria

Table 14.2 Entrant’s Best Response and

Profit

Figure 14.4 Cournot and Stackelberg

Equilibria

Figure 14.5 Incumbent

Commits to a Large

Quantity to Deter Entry

Figure 14.6 Incumbent

Loss if it Deters Entry

Solved Problem 14.3 (Page 496)

Figure 14.7 Investment Game Tree

Figure 14.8 Raising-Costs Game Tree

Application (Page 503) Evidence on Strategic Entry

Deterrence

Figure 14.9 Advertising

Figure 14.10 Shifts in the Marginal Benefit of Advertising

Table 14.3 Advertising Game

Cross-Chapter Analysis (Page 515) Magazine Subscriptions