Topic: Is Collusion Possible?

Student Matyukhin Anton, 2 group. Teacher Alla Friedman. Международный Институт Экономики и Финансов, 3 курс. Высшая Школа Экономики Essay in Microeconomics.Topic Is Collusion Possible 00 Contents 1. Introduction. 2. Two types of behaviour Collusive and non-collusive. 3. Game theory. a. Concept. b. The problem of collusion. c. Predatory pricing. 4. Repeated games approach. a. Concept. b. Finite game case. c. Infinite game case. i. Trigger strategy ii. Tit-for-Tat. d. Finite game case, Kreps approach. 5. The motives for retaliation. 6. Conclusion. 7. Bibliography. 1. Introduction. In this essay I would discuss the price and output determination under the one essential type of imperfect competition markets- oligopoly.

Inter-firm interactions in imperfect markets take many forms. Oligopoly theory, those name refers to competition among the few, lack unambiguous results of these interactions unlike monopoly and perfect competition. There is a variety of results derived from many different behavioural assumptions, with each specific model potentially relevant to certain real-world situations, but not to others.

Here we are interested in the strategic nature of competition between firms. Strategic means the dependence of each person s proper choice of action on what he expects the other to do. A strategic move of a person influences the other person s choice, the other person s expectation of how would this particular person behave, in order to produce the favourable outcome for him. 2.

Two types of behaviour Collusive and non-collusive

The notion of game theory would a good starting point in the study of ... The non-co-operative outcome for each firm would be to get the pay-off... In the case of his entering, the incumbent firm can either fight this ... In this kind of game there is always a next time in which a rival s be... Finite game case, Kreps approach. Lets now return to the question of h...

Conclusion

Conclusion. So far I have discussed the collusion using some simple ex... But there may be several firms in the industry, and in fact firms have... It may be that their decision variable is price, investment, RD and ad... I have examined different assumptions and predictions, which allow or ... In reality such thing as collusion definitely takes place, if it had n...

Bibliography

Bibliography . 1. J.Vickers, Strategic competition among the few- Some recent developments in the economics of industry. 2. J.Tirole, The theory of industrial organisation. Ch 6. 3. Estrin Laidler.

Introduction to microeconomics. Ch 17. 4. W.Nicholson, Microeconomic theory. Ch 20.