This document describes 5 market games that can be used to teach economics concepts. The games progress from simpler to more complex:
1. Market Game 1 introduces sunk costs and monopoly pricing in a short game. It provides a benchmark for later competition games.
2. Market Game 2 introduces fixed costs, capacity constraints, and differentiated goods. Students compete on markets with different structures to understand how these factors impact prices and profits.
3. Market Game 3 focuses on how the number of competitors affects competition intensity and prices.
4. Market Game 4 introduces environmental policies like taxes, quotas and permits. It shows how these tools work and the importance of marginal reasoning. Students compete considering short-run price and long-
Be chap7 pricing strategies for firms with market powerfadzliskc
This document discusses pricing strategies for firms with market power. It explains how firms can maximize profits by setting price where marginal revenue equals marginal cost. The document also discusses different pricing strategies firms can use such as price discrimination, cross subsidies, transfer pricing, and price matching which allow firms to increase profits or mitigate competition. Special pricing rules are needed to address issues like double marginalization. Overall, the document provides an overview of various pricing concepts and strategies firms can employ when they have some market power.
This chapter discusses oligopoly market structures and models. It introduces the key conditions for oligopoly, including a small number of dominant firms, barriers to entry/exit, and interdependent decision making. It then examines different oligopoly models including Cournot, Stackelberg, and Bertrand, exploring how firms make output or pricing decisions strategically based on how they expect competitors to respond. The chapter aims to explain how strategic interaction shapes optimal decisions in oligopoly markets.
This document discusses the concept of perfect competition in economics. It defines perfect competition as a market with many small firms, identical products, free entry and exit of firms, and complete information. The document outlines the key features of perfect competition including: a large number of buyers and sellers, homogeneous products, no barriers to entry or exit, and profit maximization by firms. It also discusses the short run and long run equilibrium of a perfectly competitive firm, including cases where firms experience super normal profits, normal profits, or losses.
The document discusses various pricing strategies and determinants of price. It covers cost-based pricing approaches like cost-plus pricing and marginal cost pricing. It also discusses competition-based pricing strategies like penetration pricing. Other topics include product life cycle pricing, price discrimination, export pricing, and peak load pricing. The key factors that influence pricing decisions are the degree of competition, objectives of the firm, costs of production, demand in the market, and supply of the product.
Students should be able to:
Use simple game theory to illustrate the interdependence that exists in oligopolistic markets
Understanding the prisoners’ dilemma and a simple two firm/two outcome model. Students should analyse the advantages/disadvantages of being a first mover
Students will not be expected to have an understanding of the Nash Equilibrium
The Best Game (An Ice Breaker Game For Filipinos)Jerico Julaton
This game is short game that your student will love it.
The game consist of the different sections that will test your cleverness. Each Slide has a short message and then a revealing statement will appear at the end so in its not about how big or small you are but on how you are uniquely differnt to others. I found this on the internet and credits will honored to the owner who he or she was.
Here we have a work about "lexical games". You'll find many useful games you can use in your classroom with your students!!
Lexical Games are very important to motivate shy students to participate in the lesson. Moreover, it is helpful to improve skills and memory.
I hope you enjoy it!!
Be chap7 pricing strategies for firms with market powerfadzliskc
This document discusses pricing strategies for firms with market power. It explains how firms can maximize profits by setting price where marginal revenue equals marginal cost. The document also discusses different pricing strategies firms can use such as price discrimination, cross subsidies, transfer pricing, and price matching which allow firms to increase profits or mitigate competition. Special pricing rules are needed to address issues like double marginalization. Overall, the document provides an overview of various pricing concepts and strategies firms can employ when they have some market power.
This chapter discusses oligopoly market structures and models. It introduces the key conditions for oligopoly, including a small number of dominant firms, barriers to entry/exit, and interdependent decision making. It then examines different oligopoly models including Cournot, Stackelberg, and Bertrand, exploring how firms make output or pricing decisions strategically based on how they expect competitors to respond. The chapter aims to explain how strategic interaction shapes optimal decisions in oligopoly markets.
This document discusses the concept of perfect competition in economics. It defines perfect competition as a market with many small firms, identical products, free entry and exit of firms, and complete information. The document outlines the key features of perfect competition including: a large number of buyers and sellers, homogeneous products, no barriers to entry or exit, and profit maximization by firms. It also discusses the short run and long run equilibrium of a perfectly competitive firm, including cases where firms experience super normal profits, normal profits, or losses.
The document discusses various pricing strategies and determinants of price. It covers cost-based pricing approaches like cost-plus pricing and marginal cost pricing. It also discusses competition-based pricing strategies like penetration pricing. Other topics include product life cycle pricing, price discrimination, export pricing, and peak load pricing. The key factors that influence pricing decisions are the degree of competition, objectives of the firm, costs of production, demand in the market, and supply of the product.
Students should be able to:
Use simple game theory to illustrate the interdependence that exists in oligopolistic markets
Understanding the prisoners’ dilemma and a simple two firm/two outcome model. Students should analyse the advantages/disadvantages of being a first mover
Students will not be expected to have an understanding of the Nash Equilibrium
The Best Game (An Ice Breaker Game For Filipinos)Jerico Julaton
This game is short game that your student will love it.
The game consist of the different sections that will test your cleverness. Each Slide has a short message and then a revealing statement will appear at the end so in its not about how big or small you are but on how you are uniquely differnt to others. I found this on the internet and credits will honored to the owner who he or she was.
Here we have a work about "lexical games". You'll find many useful games you can use in your classroom with your students!!
Lexical Games are very important to motivate shy students to participate in the lesson. Moreover, it is helpful to improve skills and memory.
I hope you enjoy it!!
Este documento presenta un resumen de la materia de lingüística. Explora conceptos clave como el acto de comunicación, los roles de emisor y receptor, la importancia del contexto, y las dimensiones del lenguaje como el habla, la lengua y el lenguaje. También describe las principales ramas de la lingüística y teorías como el estructuralismo, funcionalismo y gramática generativa.
Teaching Games for Understanding: Net and Wall Games Lesson Demonstrationstharvey
Dr. Stephen Harvey gave a demonstration on using games for understanding in net-wall games at the Suffolk Zone APHERD conference. The demonstration focused on using tactical problems and questioning to develop deep understanding that can transfer between games, rather than focusing first on technique. One example game used was the Keep Up Game, where pairs play to keep a ball in the air within a badminton service box, needing to toss it above their head each time.
This document provides techniques for teaching English pronunciation to students. It discusses having students listen and repeat words, classify words by sounds, provide examples, and write sentences with contrasting sounds. It also recommends dictation, identifying words with the same sounds, minimal pairs, tongue twisters, homophones, homographs, and using authentic listening materials at appropriate levels. The goal is to choose techniques that focus on specific sounds and provide natural listening practice for students.
This document provides an overview of English phonology and phonetics. It begins with introductions to phonemes, accent, dialect, and transcription. It then covers the articulation of speech sounds, including vowels, consonants, diphthongs, and syllables. It describes the larynx, vocal folds, and glottis and how they relate to voicing and phonation. It also discusses phonetic transcription and the differences between phonemic and phonetic transcription. Overall, the document presents the key concepts and terminology used in the study of English phonology and phonetics.
1. This document discusses principles of teaching English pronunciation. It emphasizes that with increased globalization, learners are exposed to various English accents, so teachers should provide examples of different variations.
2. The document outlines three approaches to pronunciation teaching: integrated lessons that combine pronunciation with other skills; remedial lessons that contrast sounds between a learner's native language and English; and practice lessons that focus on accuracy, fluency, and communication.
3. Accuracy practice aims to correctly produce new sounds after presentation, while fluency practice uses sounds in more natural communication to take attention off the language itself. The goal is for learners to recognize, pronounce, and automatically use new phonological elements.
Phonemes are the basic units of phonology that signal differences in meaning. They are the perceived speech sounds that make up words. This document discusses phonemes and pronunciation, describing phonemes, features of pronunciation including segmental features like vowels and consonants, and suprasegmental features. It also outlines the human speech apparatus and articulators involved in sound production.
This document presents four pictures that together spell out the word "SUSTAINABLE" through their initial letters, with each picture corresponding to a set of letters. The pictures show concepts related to sustainability, including a wind turbine, recycling bins, a tree, and erosion.
This document appears to be clues for a 4 Pics 1 Word game, with each line providing a single word clue. Some of the clues include "Watch!", "Smile!", "Nature!", "Fight!", "Shape!", "Capital!", "Provide!", "Bite!", "Lose!", "Correct!", "Recycle!", "Trend!", "Diverse!", "Bread!", "Whole!", and "Line!".
Este documento describe las consonantes desde una perspectiva fonética y fonológica. Explica que las consonantes son sonidos que se producen al estrechar u obstruir los órganos fonadores al paso del aire. Luego clasifica las consonantes por su lugar de articulación (bilabiales, dentales, palatales, etc.) y por su modo de articulación (oclusivas, fricativas, nasales, etc.). Finalmente, proporciona algunos ejemplos de consonantes dentro de cada categoría.
This document provides an introduction to phonetics and phonology. It discusses:
1) The difference between phonetics and phonology - phonetics is concerned with how sounds are produced and perceived, while phonology is concerned with how sounds function in relation to each other in a language.
2) The speech organs involved in sound production, including the lungs, larynx, pharynx, oral and nasal cavities.
3) Consonants are classified by their voicing (whether vocal folds are used), place of articulation (where air flow is obstructed), and manner (nature of obstruction).
4) Vowels involve less obstruction of air flow than consonants
1. The document provides a detailed timeline and overview of the history of English literature from Old English to the modern period.
2. It traces the development of the English language from its Old English roots following the Anglo-Saxon invasion of Britain in the 5th century through the Middle English period after the Norman Conquest and into the Renaissance.
3. Key authors and works are mentioned for each period of English literature, including Chaucer, Shakespeare, Milton, Austen, the Brontës, Dickens, and others.
This document does not contain any meaningful information to summarize in 3 sentences or less. It consists of random letters and symbols with no context.
Este documento presenta un resumen de los principales temas de Biología General para el primer bimestre. Incluye información sobre la célula y su organización, la reproducción celular en procariotas y eucariotas, la genética Mendeliana y la teoría de la evolución de Darwin. Los docentes a cargo son Rosa Armijos, José Patiño, Oscar Vivanco y Máximo Moreira.
Asesoria trabajo fin de titulacion (Lineas y proyectos de investigación )Videoconferencias UTPL
El documento presenta líneas y proyectos de investigación para guiar el trabajo de fin de titulación de estudiantes de ingeniería en administración en banca y finanzas. Incluye cuatro líneas de investigación y dos proyectos específicos sobre estructura de capital de pymes y competitividad del microcrédito para pymes. Además, provee preguntas orientadoras para que los estudiantes desarrollen sus propios temas de investigación alineados a los proyectos presentados.
Este documento presenta tres secciones:
1) Explica la oración según el Catecismo de la Iglesia Católica, incluyendo definiciones, la revelación de la oración en el Antiguo y Nuevo Testamento, y las enseñanzas de Jesús.
2) Describe el "Código Oracional" de Fernando Rielo para misioneros, incluyendo que la oración sea íntima, sencilla, contrita, afectuosa, atenta, continua e intercesora.
3) Examina los fundamentos de la esp
1) Phonology is the study of speech sounds and how they are organized in languages. It examines units of sound like phonemes, morphemes, and their patterns.
2) Speech sounds can be classified as either consonants or vowels. Consonants involve restricting air flow while vowels allow free flow of air to create different sounds.
3) The relationship between phonemic representations of words and their phonetic pronunciations is governed by rules of phonology. These rules include assimilation, dissimilation, and epenthesis.
This document provides an overview of key concepts in game theory and oligopoly models. It discusses oligopoly market structures where a few firms account for most production. It also covers the Cournot and Bertrand models of oligopoly competition. The document explores game theory concepts such as the prisoner's dilemma, Nash equilibrium, dominant strategies, and repeated games. It examines how these concepts apply to oligopolistic pricing behaviors and the implications of threats, commitments and credibility in strategic interactions between firms.
The document discusses third-degree price discrimination, where a firm can segment consumers based on observable characteristics and charge different prices to different groups. Under third-degree price discrimination, optimal profits are achieved by separating markets and setting different prices (pa ≠ pb) in each. However, whether using single or multiple prices, monopoly pricing depends on demand characteristics like price elasticity. The firm finds the profit-maximizing quantities (qa* and qb*) and corresponding prices (pa* and pb*) by setting marginal revenue equal to marginal cost in each market. The market with less elastic demand will face a higher price and larger markup over cost.
Be chap6 oligopoly models and game theory jan2019fadzliskc
This document provides an overview of game theory concepts. It discusses key elements of games such as players, strategies, and payoffs. It also covers different types of games including simultaneous-move games, sequential-move games, one-shot games, and repeated games. Equilibrium strategies such as dominant strategies and Nash equilibria are explained. Examples of pricing games and coordination games are used to illustrate these concepts. Trigger strategies are discussed as a way for firms to potentially collude without fear of cheating in infinitely or finitely repeated games.
Este documento presenta un resumen de la materia de lingüística. Explora conceptos clave como el acto de comunicación, los roles de emisor y receptor, la importancia del contexto, y las dimensiones del lenguaje como el habla, la lengua y el lenguaje. También describe las principales ramas de la lingüística y teorías como el estructuralismo, funcionalismo y gramática generativa.
Teaching Games for Understanding: Net and Wall Games Lesson Demonstrationstharvey
Dr. Stephen Harvey gave a demonstration on using games for understanding in net-wall games at the Suffolk Zone APHERD conference. The demonstration focused on using tactical problems and questioning to develop deep understanding that can transfer between games, rather than focusing first on technique. One example game used was the Keep Up Game, where pairs play to keep a ball in the air within a badminton service box, needing to toss it above their head each time.
This document provides techniques for teaching English pronunciation to students. It discusses having students listen and repeat words, classify words by sounds, provide examples, and write sentences with contrasting sounds. It also recommends dictation, identifying words with the same sounds, minimal pairs, tongue twisters, homophones, homographs, and using authentic listening materials at appropriate levels. The goal is to choose techniques that focus on specific sounds and provide natural listening practice for students.
This document provides an overview of English phonology and phonetics. It begins with introductions to phonemes, accent, dialect, and transcription. It then covers the articulation of speech sounds, including vowels, consonants, diphthongs, and syllables. It describes the larynx, vocal folds, and glottis and how they relate to voicing and phonation. It also discusses phonetic transcription and the differences between phonemic and phonetic transcription. Overall, the document presents the key concepts and terminology used in the study of English phonology and phonetics.
1. This document discusses principles of teaching English pronunciation. It emphasizes that with increased globalization, learners are exposed to various English accents, so teachers should provide examples of different variations.
2. The document outlines three approaches to pronunciation teaching: integrated lessons that combine pronunciation with other skills; remedial lessons that contrast sounds between a learner's native language and English; and practice lessons that focus on accuracy, fluency, and communication.
3. Accuracy practice aims to correctly produce new sounds after presentation, while fluency practice uses sounds in more natural communication to take attention off the language itself. The goal is for learners to recognize, pronounce, and automatically use new phonological elements.
Phonemes are the basic units of phonology that signal differences in meaning. They are the perceived speech sounds that make up words. This document discusses phonemes and pronunciation, describing phonemes, features of pronunciation including segmental features like vowels and consonants, and suprasegmental features. It also outlines the human speech apparatus and articulators involved in sound production.
This document presents four pictures that together spell out the word "SUSTAINABLE" through their initial letters, with each picture corresponding to a set of letters. The pictures show concepts related to sustainability, including a wind turbine, recycling bins, a tree, and erosion.
This document appears to be clues for a 4 Pics 1 Word game, with each line providing a single word clue. Some of the clues include "Watch!", "Smile!", "Nature!", "Fight!", "Shape!", "Capital!", "Provide!", "Bite!", "Lose!", "Correct!", "Recycle!", "Trend!", "Diverse!", "Bread!", "Whole!", and "Line!".
Este documento describe las consonantes desde una perspectiva fonética y fonológica. Explica que las consonantes son sonidos que se producen al estrechar u obstruir los órganos fonadores al paso del aire. Luego clasifica las consonantes por su lugar de articulación (bilabiales, dentales, palatales, etc.) y por su modo de articulación (oclusivas, fricativas, nasales, etc.). Finalmente, proporciona algunos ejemplos de consonantes dentro de cada categoría.
This document provides an introduction to phonetics and phonology. It discusses:
1) The difference between phonetics and phonology - phonetics is concerned with how sounds are produced and perceived, while phonology is concerned with how sounds function in relation to each other in a language.
2) The speech organs involved in sound production, including the lungs, larynx, pharynx, oral and nasal cavities.
3) Consonants are classified by their voicing (whether vocal folds are used), place of articulation (where air flow is obstructed), and manner (nature of obstruction).
4) Vowels involve less obstruction of air flow than consonants
1. The document provides a detailed timeline and overview of the history of English literature from Old English to the modern period.
2. It traces the development of the English language from its Old English roots following the Anglo-Saxon invasion of Britain in the 5th century through the Middle English period after the Norman Conquest and into the Renaissance.
3. Key authors and works are mentioned for each period of English literature, including Chaucer, Shakespeare, Milton, Austen, the Brontës, Dickens, and others.
This document does not contain any meaningful information to summarize in 3 sentences or less. It consists of random letters and symbols with no context.
Este documento presenta un resumen de los principales temas de Biología General para el primer bimestre. Incluye información sobre la célula y su organización, la reproducción celular en procariotas y eucariotas, la genética Mendeliana y la teoría de la evolución de Darwin. Los docentes a cargo son Rosa Armijos, José Patiño, Oscar Vivanco y Máximo Moreira.
Asesoria trabajo fin de titulacion (Lineas y proyectos de investigación )Videoconferencias UTPL
El documento presenta líneas y proyectos de investigación para guiar el trabajo de fin de titulación de estudiantes de ingeniería en administración en banca y finanzas. Incluye cuatro líneas de investigación y dos proyectos específicos sobre estructura de capital de pymes y competitividad del microcrédito para pymes. Además, provee preguntas orientadoras para que los estudiantes desarrollen sus propios temas de investigación alineados a los proyectos presentados.
Este documento presenta tres secciones:
1) Explica la oración según el Catecismo de la Iglesia Católica, incluyendo definiciones, la revelación de la oración en el Antiguo y Nuevo Testamento, y las enseñanzas de Jesús.
2) Describe el "Código Oracional" de Fernando Rielo para misioneros, incluyendo que la oración sea íntima, sencilla, contrita, afectuosa, atenta, continua e intercesora.
3) Examina los fundamentos de la esp
1) Phonology is the study of speech sounds and how they are organized in languages. It examines units of sound like phonemes, morphemes, and their patterns.
2) Speech sounds can be classified as either consonants or vowels. Consonants involve restricting air flow while vowels allow free flow of air to create different sounds.
3) The relationship between phonemic representations of words and their phonetic pronunciations is governed by rules of phonology. These rules include assimilation, dissimilation, and epenthesis.
This document provides an overview of key concepts in game theory and oligopoly models. It discusses oligopoly market structures where a few firms account for most production. It also covers the Cournot and Bertrand models of oligopoly competition. The document explores game theory concepts such as the prisoner's dilemma, Nash equilibrium, dominant strategies, and repeated games. It examines how these concepts apply to oligopolistic pricing behaviors and the implications of threats, commitments and credibility in strategic interactions between firms.
The document discusses third-degree price discrimination, where a firm can segment consumers based on observable characteristics and charge different prices to different groups. Under third-degree price discrimination, optimal profits are achieved by separating markets and setting different prices (pa ≠ pb) in each. However, whether using single or multiple prices, monopoly pricing depends on demand characteristics like price elasticity. The firm finds the profit-maximizing quantities (qa* and qb*) and corresponding prices (pa* and pb*) by setting marginal revenue equal to marginal cost in each market. The market with less elastic demand will face a higher price and larger markup over cost.
Be chap6 oligopoly models and game theory jan2019fadzliskc
This document provides an overview of game theory concepts. It discusses key elements of games such as players, strategies, and payoffs. It also covers different types of games including simultaneous-move games, sequential-move games, one-shot games, and repeated games. Equilibrium strategies such as dominant strategies and Nash equilibria are explained. Examples of pricing games and coordination games are used to illustrate these concepts. Trigger strategies are discussed as a way for firms to potentially collude without fear of cheating in infinitely or finitely repeated games.
Competition, bargaining power and pricing in two-sided marketsKimmo Soramaki
We argue that skewed pricing found empirically in many two sided markets, can perhaps be explained by which side chooses the platform when both sides are willing to transact on multiple platforms.
Competition, bargaining power and pricing in two sided marketsKimmo Soramaki
We develop a usage model of two-sided markets with perfect multi-homing. Bargaining plays a role when market sides prefer different platforms.
We are interested in the profit-maximising usage fees set by homogeneous duopolistic platforms.
We find that for sufficiently low cost level, in Nash-equilibrium all costs are borne by the side without bargaining power. The equilibrium price allows excess profits for both platforms.
We argue that skewed pricing found empirically in many two sided markets, can perhaps be explained by which side chooses the platform when both sides are willing to transact on multiple platforms.
Oligopoly content slideshow. Designed for the Economic A level qualification. Can be used in revision and in class.
Subtopics:
Intro to Oligopoly
Non-Cooperative Strategy I: The Kinked Demand Curve Model
Non-Cooperative Strategy II: Game Theory
Cooperative Strategy: Collusion & Cartels
Non-price Competition
Chapter 6 market structure competitive, monopolistic and monopolistically c...skceducation
This document summarizes key concepts related to different market structures:
- Perfect competition is characterized by many small firms, homogeneous products, perfect information, and free entry and exit. Firms are price-takers and earn zero economic profits in the long run.
- Monopolies have barriers to entry that give them power over prices and outputs. They maximize profits where marginal revenue equals marginal costs, resulting in higher prices and lower quantities than under perfect competition.
- Monopolistic competition involves differentiated products, free entry and exit, and firms that do not consider rivals' behavior. In long run, firms earn zero profits as entry continues until prices equal average costs.
Monopolistic competition is characterized by many small firms that produce differentiated products. In the short run, firms can earn economic profits by producing at a quantity where marginal revenue equals marginal cost. However, in the long run, free entry and exit causes the demand curve to shift left as more firms enter, eliminating economic profits and resulting in normal profits for firms. Firms produce at the minimum point of their average total cost curve where price equals average cost.
This document discusses oligopoly and strategic behavior in markets. It begins by defining oligopoly as a market structure with a small number of firms, differentiated products, significant entry barriers, and where firms interact strategically. It then explores duopoly and shows how firms in a duopoly market may collude like a joint monopoly or compete by lowering prices. Game theory, like the prisoner's dilemma, is presented as a way to understand strategic interactions between oligopolists.
This document discusses key concepts in game theory and provides examples of how game theory can be applied to economics. It covers topics like the prisoner's dilemma, pricing games between firms, and evaluating factors like first mover advantage. Examples are given around oil markets, price wars, and advertising spending. Limitations of game theory are noted, such as its tendency to oversimplify complex business decisions.
- Monopolistic competition describes a market with many producers offering similar but differentiated products, with each firm having some control over price. Barriers to entry are low, allowing firms to freely enter and exit the market.
- In the short run, firms maximize profits where marginal revenue equals marginal cost. In the long run with free entry and exit, firms earn zero economic profit as supply and demand equilibrate.
- Oligopoly is dominated by a few large firms. These firms are interdependent and must consider competitors' responses in decision making. Barriers to entry allow oligopolies to persist and earn economic profits.
Stackelberg's Game in Moser Baer -Cost Estimation - Mathematics for business ...MayankAgrawal205
- The document analyzes pricing strategies for Moser Baer Compact Discs using the Stackelberg game theory model of duopoly.
- It establishes the demand function for CDs based on sales data and defines key terms like supply chain, oligopoly, and duopoly.
- The problem is to find the optimal wholesale and retail prices using a Stackelberg model where either the manufacturer or retailer is the leader.
- Equations are developed for the manufacturer and retailer profits based on costs, revenues, and demand. The manufacturer stackelberg and retailer stackelberg models are defined and profit functions are derived.
Be chap5 competitive, monopoly, monopolistic competitive marketsfadzliskc
This document provides an overview of different market structures including perfect competition, monopoly, and monopolistic competition. It defines key characteristics of each market structure and explains how firms determine price and output to maximize profits or minimize losses in the short run and long run. The document also discusses sources of monopoly power and how monopolies, unlike competitive firms, do not have a supply curve. It analyzes the social costs of monopoly power through deadweight loss.
This document provides an overview of different market structures:
- Perfect competition is characterized by many small firms, homogeneous products, perfect information and free entry/exit. Firms are price-takers and earn zero profits in the long run.
- Monopolies have a single firm, barriers to entry, downward sloping demand and set price above marginal cost to earn profits.
- Monopolistic competition has many small firms, differentiated products, free entry/exit. In the short run firms earn profits but in the long run entry drives profits to zero as under perfect competition.
This presentation by Lapo Filistrucchi, Researcher at the Department of Economics of the University of Florence, was made during the discussion “Rethinking the use of traditional antitrust enforcement tools in multi-sided markets” held at the 127th meeting of the OECD Competition Committee on 22 June 2017. More papers and presentations on the topic can be found out at oe.cd/1ZZ.
A market can be defined as a group of firms willing and able to sell a similar product or service to the same potential buyers.
Imperfect competition covers all situations where there is neither pure competition nor pure monopoly.
Perfect competition and pure monopoly are very unlikely to be found in the real world.
In the real world, it is the imperfect competition lying between perfect competition and pure monopoly.
The fundamental distinguishing characteristic of imperfect competition is that average revenue curve slopes downwards throughout its length, but it slopes downwards at different rates in different categories of imperfect competition.
Monopoly refers to the market situation where there is a
Single seller selling a product which has no close substitutes.
Monopolies are characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the existence of a high monopoly price well above the firm's marginal cost that leads to a high monopoly profit
The word “oligopoly” comes from the Greek “oligos” meaning "little or small” and “polein” meaning “to sell.” When “oligos” is used in the plural, it means “few” ,few firms or few sellers.
DEFINATION:
Oligopoly is that form of market where there are few firms and there is natural interdependence among the firms regarding price and output policy.
Game theory provides a framework for analyzing strategic decision-making between interdependent players. It has become a central tool in industrial economics and managerial decision-making. Key concepts include Nash equilibrium, dominant strategies, backward induction, repeated games, and using penalties/rewards to support collusion. While game theory offers useful insights, its predictive power is limited by complex assumptions and multiple possible equilibria. Real-world applications require considering additional empirical factors not fully captured by theoretical models.
Similar to Market games for teaching Economics (20)
How to Setup Warehouse & Location in Odoo 17 InventoryCeline George
In this slide, we'll explore how to set up warehouses and locations in Odoo 17 Inventory. This will help us manage our stock effectively, track inventory levels, and streamline warehouse operations.
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumMJDuyan
(𝐓𝐋𝐄 𝟏𝟎𝟎) (𝐋𝐞𝐬𝐬𝐨𝐧 𝟏)-𝐏𝐫𝐞𝐥𝐢𝐦𝐬
𝐃𝐢𝐬𝐜𝐮𝐬𝐬 𝐭𝐡𝐞 𝐄𝐏𝐏 𝐂𝐮𝐫𝐫𝐢𝐜𝐮𝐥𝐮𝐦 𝐢𝐧 𝐭𝐡𝐞 𝐏𝐡𝐢𝐥𝐢𝐩𝐩𝐢𝐧𝐞𝐬:
- Understand the goals and objectives of the Edukasyong Pantahanan at Pangkabuhayan (EPP) curriculum, recognizing its importance in fostering practical life skills and values among students. Students will also be able to identify the key components and subjects covered, such as agriculture, home economics, industrial arts, and information and communication technology.
𝐄𝐱𝐩𝐥𝐚𝐢𝐧 𝐭𝐡𝐞 𝐍𝐚𝐭𝐮𝐫𝐞 𝐚𝐧𝐝 𝐒𝐜𝐨𝐩𝐞 𝐨𝐟 𝐚𝐧 𝐄𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫:
-Define entrepreneurship, distinguishing it from general business activities by emphasizing its focus on innovation, risk-taking, and value creation. Students will describe the characteristics and traits of successful entrepreneurs, including their roles and responsibilities, and discuss the broader economic and social impacts of entrepreneurial activities on both local and global scales.
Main Java[All of the Base Concepts}.docxadhitya5119
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2. Progression
• 5 Market Games from website economics-games.com
• To be played separately or as a sequence:
– Market Game 1: Sunk costs, monopoly, and introduction to the
next games
– Market Game 2: Impact of fixed costs and capacity constraints
on price and profits, with differentiated goods
– Market Game 3: Impact of the number of competitors on price
and profits
– Market Game 4: Price and quantity competition and CO2
environmental policies (quotas, taxes and emission permits)
– (Market Game 2b is a variant of market game 2, with
homogenous goods)
• Demand is identical in all of these games (proportionally
to the number of players on the markets), except game 2b.
5. • Very short game (5 minutes), intended to:
– Introduce student to the demand function that
will be used in the following games.
– Introduce a monopoly benchmark that will be
useful to compare with the competition situations
later.
– Have students understand the impact of sunk
costs on the ranking of alternatives.
Objective
6. Description
• Players are in a monopoly position on 2
identical markets: On each market,
– the marginal cost of production is constant and
equal to 4€.
– Players can sell up to 1000 goods on each market.
– What differs is that on the second market, there is
a sunk cost equal to 35000€.
• Repeated
7. Why is this game interesting?
• This game can seem obvious, but it is very effective as an
introduction to sunk costs and monopoly pricing.
– If players do not realize from the start that the optimal price is
the same on both markets, they will come to understand this
easily by tatonnement.
– By changing their price by tatonnement from one round to the
other, they find themselves in a situation where marginal
reasoning is perfectly natural.
– This game provides a monopoly benchmark for later games
(monopoly price ~€96, monopoly profit net of sunk costs:
~€40680).
– Even if this is not so fun, players will do it carefully in order to
prepare for later multiplayer games and get accustomed to the
demand function (provided it does not last too long).
9. Possible Theoretical debriefings
• Impact of sunk costs on the ranking of
alternatives.
• Marginal Revenue, decreasing marginal
revenue and marginal cost.
• Illustrates the interest of marginal reasoning
through the search for the monopoly price
(possible debriefing with demand data).
• Cost pass-through (monopoly price with €4
marginal cost is ~€96, revenue maximizing
price is ~€94)
10. MARKET GAME 2:
IMPACT OF FIXED COSTS AND CAPACITY
CONSTRAINTS ON PRICE AND PROFITS
(DIFFERENTIATED GOODS)
12. Objective
• Longer game (25-30 minutes), intended to:
– Explain the logic behind competition.
– Compare oligopoly with monopoly.
– Have students understand the impact of sunk
costs on prices.
– Have students understand the impact of avoidable
fixed costs on prices.
– Have students understand the impact of capacity
constraints on prices and profits.
13. Description
• Players compete against the same other players
on 5 identical markets:
• What differs is that on some markets there are
avoidable or unavoidable fixed costs, and on
others not. Production capacities also differ from
one market to another.
• Demand is the same as in game 1 (proportionally
to the number of competitors on the markets).
• Repeated game
15. Remark 1: Demand
• Demand is based on a logit model.
– There is a number of potential customers « arriving » one after the
other on the market, and then considering buying one unit of good to
one of the firms that still have something to sell.
– The reservation value of each customer is randomly drawn. Along with
another random draw (to capture unmodeled « horizontal »
differences between the goods), this determines who he buys from (if
he buys from someone).
• In all our games, in order to facilitate comparison,
demand is proportional to the number of firms on
the market:
– 5 teams on each market 5 times as many potential customers as in
the monopoly game presented before.
16. Remark 2: Parameters calibration
• M 3: Production capacity 400 total production
capacity is close to the monopoly quantity.
• M 1, 2, 5: Production capacity 1000
– limits short run competition,
– price remains above the equilibrium price with no
capacity constraints, and eventually all firms sell up to
their capacity
• M25: The level of fixed cost, €35000 is such that:
– If there are 5 or 6 players by market, one or two of them should decide
to stay out of the market 5.
– Profits on markets 2 and 4 will be negative, and the best players can
do is to accept that and try and accomodate the situation (and not
base their price on average cost!).
17. Recommended Setting
• Players are split across separate “universes”.
• Players from one universe only interact with
other players from the same universe (yet
compete with every other player for the highest
score)
– This is useful to limit over-aggressive strategies
– Balance between competition and cooperation
• Recommended setting:
– More than 1 universe
– if possible, 1 universe for 5-6 players
19. Possible Theoretical debriefings
• Comparison between monopoly and oligopoly (price and
profits).
• What drives competition?
– Residual demand and marginal revenue.
– Price elasticity of demand and the sales/margin trade-off
– The prisoner’s dilemma
• Capacity constraints as limits to price competition, keeping
prices and profits above the unconstrained level.
– First evocation of short run vs long-run competition (more about that
in the last game)
– Analogy « capacity constraints / increasing marginal costs »
20. Possible Theoretical debriefings
• Impact of sunk cost
– on best response functions.
– on equilibrium prices if every player is rational and believes that every other
player is rational
more advanced:
– on players’ strategies if they are rational and expect that some of their
competitors will not be rational and will increase their price
possible discussion about bertrand competition with differentiated goods and
capacity constraints, prices as strategic complements, etc.
The role of expectations
possible discussion about what would happen if the process is iterated. Possible
presentation of the notion of Nash Equilibrium and discussion about stability of
nash equilibria.
21. Possible Theoretical debriefings
• Impact of avoidable fixed costs
– When it does not drive any firm out of the market (=sunk cost)
– When it drives some of the firms out of the market (higher price and
profit, but through less competition)
• Price in the short run determined by avoidable costs
AND demand AND capacity constraints (and…)
24. More
• More on this game and on how to use the site:
http://economics-games.com/sunk-cost-competition
25. Possible Extensions to study collusion
with market game 2
• Have the students play again with new parameters:
– Anonymous players on some universes, and not on others?
– Encouraging communication or not?
– More or less uncertainty about the end of the game?
– Only allow price changes once every 2 or 3 rounds, on
some of the markets?
– On some markets/universes, you can invite students to
declare a price on the blackboard (non-binding
declaration)
– …
http://economics-games.com
26. Market game 2b
• Market Game 2b is identical to this game,
except that goods are perfectly
homogenous:
– The cheapest firm is the only one to sell, as long
as it has production capacity
– … then the second cheapest firm…
• Same Results with a faster convergence
28. Objective
• Short game (15 minutes), intended to:
– Explain the logic behind competition
– Compare oligopoly with monopoly
– Have students understand the impact of the
number of competitors on the competition
intensity
• Focuses more on these issues, but this is also
covered by the 2 first games.
29. Description
• Players compete against other players on 2
markets with a different number of competitors:
• Demand is proportional to the number of
competitors.
• Repeated game
– Recommended setting: 2-players markets for the first
repartition (i.e. n/2 universes), and 2 big universes with
half of the players for the second repartition
– Avoid having only 1 universe to discourage over-aggressive
strategies
30. Possible Theoretical debriefings
• Comparison between monopoly and oligopoly (price and
profits).
• What drives competition?
– Residual demand and marginal revenue.
– Price elasticity of demand and the sales/unit-price trade-off.
– The prisonner’s dilemma.
• Collusion and repeated games.
31. MARKET GAME 4:
PRICE AND QUANTITY COMPETITION,
AND CO2 ENVIRONMENTAL POLICIES
(QUOTAS, TAXES AND EMISSION
PERMITS)
32. Objective
• Longer game (45 minutes-1h), intended to:
– Introduce a few basic environmental policy tools: taxes, subsidies,
quotas, permits and explain how/why they work.
– Highlight the importance of marginal reasoning and opportunity costs.
– Have students realize the dangers of misusing average costs.
– Show the impact of marginal cost on price.
– Show how quantity competion in the long-run articulates with price
competition in the short-run.
• Can be played after market games 1 and 2, or on its own.
– In this case, I would recommend having the students play this game as
a monopoly, first.
get accustomed to the demand function.
get accustomed to the environmental policies .
provides a useful benchmark for the multiplayer game
33. Description
• Impact of environmental policies in a setting with quantity
precommitment followed by price competition.
• Players repeatedly take price and quantity decisions on four
markets subject to different environmental policies for CO2
emissions:
– no policy benchmark,
– unit taxes,
– quotas
– permits
• Production costs and demand are the same on all markets
(same as in other games)
• Detailed Rules are available here:
http://economics-games.com/resources/site/manual/environmental-economics-games.pdf
34.
35.
36. Costs and Policies
• Costs:
– A firm must pay €15 for each good produced, and then €4 for each good sold.
– Each good produced «emits» 0.5 tons of CO2
• Environmental policies:
– Market 1: benchmark market, no environmental policy.
– Market 2: €40 tax by ton of emitted CO2
– Market 3: (non-tradable) quotas, 300 tons of CO2 by round
– Market 4: CO2 emissions permits. Each firm receives 600 permits for free (or 300
permits by round).
• With a permit, a firm can emit one ton of CO2 at no cost.
• If a firm emits more CO2 than it has permits, it will buy permits at a price of €40 for
each exceeding ton of CO2.
• If it emits less CO2 than it has permits, it will sell unused permits at a price of €40
each.
• Remark: for a €40 unit tax, producing 1000 goods costs
€(15+0.5*40)*1000, i.e. €35000
– If all firms decide to produce 1000 goods, they will find themselves exactly in the
same situation as in market 2 of the second market game.
37.
38.
39. Possible Theoretical debriefings
• « Average cost of CO2 emissions » vs « marginal cost
of CO2 emissions ».
• Opportunity costs and emissions reduction subsidies
(or permits resale)
• Impact of the 3 environmental policies on CO2
emissions, prices and profits. Differences in practice.
• Windfall profits and quotas.
• …
40. Possible Theoretical debriefings
• …
• How and to what extent are taxes (or marginal cost
changes) passed through to prices. Comparison with
the impact of sunk costs on prices.
• How some variable costs in the long-run turn into
sunk costs in the short-run.
– What would happen in the short-run if a sudden,
unexpected and severe demand crisis happened?
• Cournot and Bertrand equilibria