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21 Cards in this Set

  • Front
  • Back
mutual interdependence
each firm knows that its decisions affect what other firms do
oligopoly models
cournot conjecture
each firm assumes that its rivals will not change their output when it changes its own
isoprofit curve
all the combinations of q1 and q2 that result in the same profits
bertrand conjecture
each firm assumes taht rivfals will not adjust their prices when it changes its own
bertrand equilibrium
cournot equilibrium
mutual best responses
stackelberg leader
is aware of conjectures of other firm and uses that info to decide its own output
stackelberg follower
uses cournot conjecture
tacit collusion
acheiving collusive outcome without an explicit agreement- only in oligopoly industries
Turner's view
oligopolists won't cheat b/c they know it makes no sense to cheat- tacit collusion shouldn't be prosecuted
concious parallelism
recognition of strong mutual interdependence in oligopolies
Posner's view
tacit collusion should be prosecuted- time lag between cheating and detection makes it profitable
predatory pricing
pricing below cost with the intention of driving rivals out of the market- SR loss to get monopoly profits
Areeda and Turner
makes no economic sense to price below SR MC- hard to measure- use AVC instead
consumer surplus approach (Shapiro Rule)
a procompetitive patent settlement should not lead to lower consumer surplus than on going litigation
patent pools
overlapping patents
technology tying
conditioning the sale of one product on the sale of another- Microsoft
standard setting
get board to pass a standard and then tell people you have the patent
reverse payments
patent holder pays nonpatent holder to stay off the market
work around
a product that doesn't infringe