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Game Theory and Oligopoly Profit definitions

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Termini in questo insieme (15)

  • Oligopoly
    A market structure with a few firms whose decisions are mutually dependent, leading to strategic behavior and interdependence.
  • Duopoly
    A special case of an oligopoly with only two producers, where each firm's actions directly affect the other.
  • Interdependence
    A situation where firms must consider rivals' choices when making their own output or pricing decisions.
  • Collusion
    An agreement among firms to coordinate output or prices to maximize joint profits, often resembling monopoly outcomes.
  • Incentive to Cheat
    A temptation for firms to break cooperative agreements to increase individual profit, undermining collective outcomes.
  • Monopoly
    A market with a single producer who maximizes profit by choosing output and price without competition.
  • Perfect Competition
    A market with many firms where price equals marginal cost, leading to maximum efficiency and zero economic profit.
  • Demand Curve
    A graphical representation showing the inverse relationship between price and quantity demanded in a market.
  • Total Profit
    The sum of all firms' profits in a market, influenced by output decisions and market structure.
  • Payoff Matrix
    A table displaying possible profits for each firm based on the combination of strategies chosen by all players.
  • Dominant Strategy
    A choice that yields a higher payoff for a firm regardless of competitors' actions.
  • Nash Equilibrium
    An outcome where no firm can improve its profit by changing its strategy while others keep theirs unchanged.
  • Prisoner's Dilemma
    A scenario where rational self-interest leads firms to a less optimal outcome than if they had cooperated.
  • Market Power
    The ability of a firm to influence market price and output, often reduced as competition increases.
  • Aggregate Supply
    The total quantity of goods produced by all firms in a market, shaped by strategic interactions in oligopolies.