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Week 10 Oligopoly - Coggle Diagram
Week 10 Oligopoly
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Game theory
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The prisoners dilemma
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In this case it is best for Louise to confess, no matter what Thelma does
In this case it is also best for Thelma to confess, no matter what Louise does
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Both of them confusing or choosing their dominant strategy is the Nash equilibrium. (top left outcome)
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Policy and oligopoly
Antitrust policy: government efforts that attempt to prevent oligopolies from behaving like monopolies
Predatory pricing: Firms set prices below AVC to with the intent of driving competitors off the market
Nash Equilibrium
The point at which neither player can do better by changing his/her strategy, while the other player strategy remains unchanged
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