Chapter 17 - Oligopoly

ECON:1100 Final Exam

Oligopoly

a market that is dominated by a small number of firms, also known as oligopolists

Imperfect competition

a situation in which firms compete but also posses market power

Nash equilibrium

using the best strategy, that is the best response to the strategies used by others

Dominant strategy

a strategy that is a players best action regardless of the action taken by the other player

Pareto-optimality

a strategy profile that has no other strategy profile that at least one player gets a higher payoff with another choice

HHI for an industry

the sum of the squares of each firms share of market sales

Collusion

when firms cooperate to raise their joint profits

Cartel

an agreement among several producers to obey output restrictions in order to increase their joint profits