| interactive activity
Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
Oligopoly Oligopolist Imperfect competition Duopoly Duopolist Collusion Cartel Noncooperative behavior Antitrust policy Tacit collusion Price war Interdependence Game theory Payoff Payoff matrix Prisoners’ dilemma Dominant strategy Nash equilibrium Noncooperative equilibrium Strategic behavior Tit for tat Monopolistic competition Product differentiation | an oligopoly consisting of only two firms. a player’s best action regardless of the action taken by the other player. efforts undertaken by the government to prevent oligopolistic industries from becoming or behaving like monopolies. a collapse of prices when tacit collusion breaks down. involves playing cooperatively at first, then doing whatever the other player did in the previous period. a market structure in which no firm is a monopolist, but producers nonetheless have market power they can use to affect market prices. the reward received by a player in a game, such as the profit earned by an oligopolist. an industry with only a small number of producers. a market structure in which there are many competing producers in an industry, each producer sells a differentiated product, and there is free entry and exit into and from the industry in the long run. actions by firms that ignore the effects of those actions on the profits of other firms. the attempt by a firm to convince buyers that its product is different from the products of other firms in the industry. (also known as a noncooperative equilibrium) when each player in a game chooses the action that maximizes his or her payoff given the actions of other players, ignoring the effects of his or her action on the payoffs received by those other players. an agreement among several producers to obey output restrictions in order to increase their joint profits. when a firm’s decision significantly affects the profits of other firms in the industry. (also known as a Nash equilibrium) when each player in a game chooses the action that maximizes his or her payoff given the actions of other players, ignoring the effects of his or her action on the pay- a firm in an industry with only a small number of producers. one of the two firms in a duopoly. when a firm attempts to influence the future behavior of other firms. cooperation among producers, without a formal agreement, to limit production and raise prices so as to raise one anothers’ profits. cooperation among producers to limit production and raise prices so as to raise one another’s profits. shows how the payoff to each of the participants in a two- a game based on two premises: (1) Each player has an incentive to choose an action that benefits itself at the other player’s expense, and (2) When both players act in this way, both are worse off than if they had acted cooperatively. the study of behavior in situations of interdependence. |