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