Oligopoly and Strategic Behavior

A set of flashcards focusing on key vocabulary related to oligopoly and strategic behavior in economics.

Oligopoly

A market structure dominated by a few large firms whose behavior significantly affects other firms.

Barriers to Entry

Factors that prevent or impede new competitors from easily entering an industry or area of business.

Non-price Competition

Competition that focuses on factors other than price, such as advertising and product differentiation.

Collusion

An agreement among firms to restrict competition, often by fixing prices or limiting production.

Price Leadership

When one firm sets prices and others in the industry follow.

Nash Equilibrium

A situation in which each player's strategy is optimal given the strategies of all other players, meaning no player can benefit from changing their strategy unilaterally.

Dominant Strategy

A strategy that yields a higher payoff for a player regardless of what the other player does.

Game Theory

A theoretical framework for conceiving social situations among competing players, used to analyze strategic interactions.

Cartel

A formal agreement among competing firms to control prices or limit production, which is illegal in the US.

False Collusion

Engaging in price fixing or collusive behavior without direct communication among firms.