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 Interdependence Game theory Payoff Payoff matrix Prisoners’ dilemma Dominant strategy Nash equilibrium Noncooperative equilibrium Strategic behavior Tit for tat Tacit collusion Antitrust policy Price war Product differentiation Price leadership Nonprice competition | cooperation among producers, without a formal agreement, to limit production and raise prices so as to raise one another’s profits. actions taken by a firm that attempt to influence the future behavior of other firms. an agreement among several producers to obey output restrictions in order to increase their joint profits. legislative and regulatory efforts undertaken by the government to prevent oligopolistic industries from becoming or behaving like monopolies. actions by firms that ignore the effects of those actions on the profits of other firms. an oligopoly consisting of only two firms. the study of behavior in situations of interdependence. Used to explain the behavior of an oligopoly. the attempt by firms to convince buyers that their products are different from those of other firms in the industry. If firms can so convince buyers, they can charge a higher price. a firm in an industry with only a small number of producers. competition in areas other than price to increase sales, such as new product features and advertising; especially engaged in by firms that have a tacit understanding not to compete on price. one of the two firms in a duopoly. in game theory, a strategy that 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. an industry with only a small number of producers. in game theory, a diagram that shows how the payoffs to each of the participants in a two-player game depend on the actions of both; a tool in analyzing interdependence. in game theory, an action that is a player’s best action regardless of the action taken by the other player. cooperation among producers to limit production and raise prices so as to raise one another’s profits. a collapse of prices when tacit collusion breaks down. in game theory, the equilibrium that results when all players choose the action that maximizes their payoffs given the actions of other players, ignoring the effect of that action on the payoffs of other players; also known as Nash equilibrium. in game theory, the reward received by a player (for example, the profit earned by an oligopolist). a relationship among firms in which their decisions significantly affect one another’s profits; characteristic of oligopolies. in game theory, the equilibrium that results when all players choose the action that maximizes their payoffs given the actions of other players, ignoring the effect of that action on the payoffs of other players; also known as noncooperative equilibrium. a pattern of behavior in which one firm sets its price and other firms in the industry follow. |