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Why does antitrust matter if we can just use auctions to get truthful reporting of marginal costs?

Why does antitrust matter if we can just use auctions to get truthful reporting of marginal costs? Like, if I want to get an oligopoly market to truthfully price items at socially optimal marginal ...
Daycent's user avatar
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0 answers
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Sequential Bertrand competition Nash equilibrium when marginal costs are zero

How do I find the Nash equilibrium in sequential Bertrand competition between 2 firms if both their marginal costs are zero?
needeconshelp00's user avatar
1 vote
1 answer
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Judge prosecutor example of Kameinica and Gentzkow

Based on Kamenica and Gentzkow example about the prosecutor and the judge. The utilities of the sender and the receiver are $v(\alpha,\omega)=\alpha$ and $u(\alpha,\omega)=-(\alpha-\omega)^2$. The ...
Oliver Queen's user avatar
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0 answers
25 views

Why do firms produce less than what is socially optimal in an imperfect competition?

I just read an introduction to imperfect competition in my AP microeconomics textbook and one of the practice questions asked about production in imperfect competition. The answer choices were ...
Luke Lee's user avatar
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1 answer
38 views

About the optimal period 1 price in a 2 period scenario for switching costs (Klemperer, 1995)

In "Competition when consumers have switching costs" (1995), Klemperer puts forward an example with 2 periods, 2 firms, switching costs and transport costs in a Hoteling model. He then shows ...
Nasan's user avatar
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2 answers
116 views

Why can't an individual producer influence market price in perfect competition?

I’ve been told that under perfect competition, an individual producer is a price-taker and has no influence on the market equilibrium price. But this doesn’t make sense to me since the market ...
Anthony Fallone's user avatar
39 votes
2 answers
7k views

Why does Taiwan dominate the semiconductors market?

The recent visit of US politician Nancy Pelosi to Taiwan generated a lot of news about the dependence the world has on Taiwan, given its dominance of the semiconductor market. But I couldn't find ...
sourcream's user avatar
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0 answers
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Is difficulty for small businesses in an industry seen negatively as approaching monopoly?

I was just curious about fields where it’s hard to break in on a small scale or as a beginner without much expertise. On the one hand, if some organization/entity figured out a way to produce a ...
Julius Hamilton's user avatar
8 votes
4 answers
696 views

How can we explain quantity competition and price taking?

Note: This is a question on the didactics of microeconomics, directed to those of you who have some experience teaching this subject. When I studied the basic principles of microeconomics, a price-...
VARulle's user avatar
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1 vote
1 answer
34 views

Inflation, competition, and efficiency

I recently watched an interview with a reporter who looked through recent public quarterly filings and found that production costs were increasing and these were being passed on to consumers but that ...
Asklepian's user avatar
0 votes
0 answers
14 views

Concentration Ratio - Real Estate Appraisals/Valuations

with reference to "Market Structures", how can you work out whether your industry is operating in an Oligopoly/monopolistic/...-environment if there is insufficient data? I'm specifically ...
AnthonyWDR's user avatar
2 votes
1 answer
144 views

Do monopolistic firms indirectly increase prices of products sold by perfectly competitive firms?

Correct me if I'm wrong, but this is my understanding: In perfect competition, firms set the price at the marginal cost of production. This gives them a relatively low amount of profit. In ...
causative's user avatar
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2 answers
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Is it allowed to have a company that is not profitable?

In my old memories my teacher said that we can't have a company who are not profitable. The reason is to prevent unfair competition. Ex : Toyota sell car at 10 \$ during 2 years. Every other mark ...
Softon's user avatar
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2 votes
1 answer
364 views

Realistic examples of quantity competition

In microeconomic models of oligopolies we consider price competition and quantity competition (think Cournot, Bertrand, Stackelberg). I can easily imagine price competition where a producer sets the ...
Richard Hardy's user avatar
0 votes
0 answers
129 views

Sequential and simultaneous price competition

Frims 1 (leader) and 2 (follower) compete in price with product differentiation • Find the equilibrium price, quantity and profit when they choose price simultaneously and sequentially. q1=100-10p1+...
micurb's user avatar
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0 answers
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Long run equilibrium price under perfect competition

I have a problem related to Ricardian rent. I have one firm, let's call it X firm, and all of the other firms in the market. All firms have to pay some transportation costs due to their land except ...
madetolast's user avatar
1 vote
0 answers
79 views

Better Model for Dynamic pricing - Stackelberg model or Bertrand model

Objective - I am building a dynamic pricing tool for airline tickets which will consider the competitor prices. Taking competitor price as reference, this tool will price the ticket. Also instead of ...
sujithDas's user avatar
3 votes
2 answers
206 views

How are real income and utility the same thing?

The textbook I'm using, "Microeconomic Theory: Basic Principles and Extensions", treats utility and real income as the same thing in the chapters on compensated and uncompensated demand. I ...
reasonStore's user avatar
2 votes
1 answer
85 views

How can a "producer face a limited market as regards sales and yet a highly competitive market as regards price"?

Kaldor (1972): it is evident that the co-existence of increasing returns and competition—emphasised by Young and also by Marx, but wholly excluded by the axiomatic framework of Walrasian economics—is ...
user avatar
3 votes
1 answer
346 views

Does the Labor Theory of Value hold in the long term in competitive markets?

Most criticisms of the Labor Theory of Value I have come across go something like this quote from Carl Menger: There is no necessary and direct connection between the value of a good and whether, or ...
markv12's user avatar
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0 answers
29 views

Airline competition and econometrics

If I wish to understand the competitive constraints of airline A on airline B, what sort of econometric relationship should I investigate ?. Immediately what comes to mind is to look at the impact of ...
Meera Unni's user avatar
1 vote
1 answer
73 views

Does a competitive advantage lead to abnormal profit? [closed]

Given that organisational capital is specific and difficult to replicate it is considered a competitive advantage (see e.g. here) According to Wang (2014) competitive advantage is obtained when an ...
sba222's user avatar
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-4 votes
2 answers
70 views

Is there a qualitative difference between the rent derived from a supply fixed by nature and single supplier required to supply a fixed quantity?

The assumption are that supply is absolutely and permanently fixed at q average and marginal costs are zero demand always exceeds supply (P ≥ 0) The graph should look the same in both cases: a ...
sba222's user avatar
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1 vote
2 answers
120 views

Are urban land (location) markets considered competitive even though the market price does not equal marginal cost (zero)?

Urban land (location) supply is fixed and the marginal cost of bringing an urban plot into production is zero. Even when land owners do not collude to limit the supply, the fixed supply arguably ...
sba222's user avatar
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5 votes
1 answer
231 views

What has been the reception of Posner & Weyl’s claim that property rights lead to market power?

Posner & Weyl claim that property rights lead to monopoly rents: Property Is Only Another Name for Monopoly Radical Markets Have their claims been elaborated, tested, or peer-reviewed? In ...
sba222's user avatar
  • 831
7 votes
1 answer
105 views

Measuring effects of degree of (buyer) competition on price: references

I would like to examine the effect of degree of competition (market power?) among buyers on price of a product. I have data on product price, number of buyers with nonzero purchases and a couple more ...
Richard Hardy's user avatar
1 vote
2 answers
242 views

How does a CLEC innovate?

A CLEC, competitive local exchange carrier, is described... A competitive local exchange carrier (CLEC), in the United States and Canada, is a telecommunications provider company (sometimes called a &...
H2ONaCl's user avatar
  • 941
2 votes
1 answer
47 views

The Dumping Argument and Trusts

I have often heard the following argument against the antimonopoly/anticollusion law: Whenever the entrepreneurs decide to enter into "illegal" collaboration, each one has an opportunity to ...
Zhiltsoff Igor's user avatar
5 votes
4 answers
205 views

Why have so many legitimate smaller biotechs sprung up and thrived?

I stumbled this question on r/AskScienceDiscussion, but I'd like to ask it from a microeconomics or competition standpoint. Why can't Big Pharma accomplish what legitimate small biotechs have? ...
user avatar
2 votes
1 answer
71 views

Does the theory of contestable markets apply to industries where there is a natural monopoly?

The theory contestable markets requires that there be no barriers to entry, no sunk costs, and access to the same level of technology. I know common industries that have natural monopolies (like ...
Scc33's user avatar
  • 353
5 votes
1 answer
134 views

Has it truly been established that the restaurant industry operates on thin margins?

For as long as I can remember I've constantly seen the truism that restaurants operate on "razor sharp margins" repeated endlessly by the media, the restaurant industry, and the average joe. This ...
Ciudadano's user avatar
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0 votes
1 answer
40 views

Why is the equilibrium network size can be less than the socially optimal size in networks w/ positive externalities for single system?

For Context, I am reading http://web.mit.edu/rpindyck/www/Courses/NetEx19.pdf. The chapter talks about network externalities in single system like fax machine, email, vaccinations for measles. ...
kms's user avatar
  • 131
1 vote
1 answer
162 views

Prices set by firms are the same in a Salop circle. But why?

Trying to calculate the prices charged by each firm, I don't understand why the solution argues that all firms set the same price. If I use the assumption that they are the same, I can figure out the ...
Jente's user avatar
  • 13
0 votes
0 answers
29 views

Military and Business Strategy

I am thinking through the parallels between military and business strategy but am stuck on a foundational aspect. Most of business strategy results from some kind of competition in order to gain ...
user86422's user avatar
3 votes
6 answers
418 views

Why do we spread knowledge across nations?

We have access to lots of knowledge on paper sharing platforms, open course platforms, open-source platforms and question asking platforms and etc, and Tesla opened all its electric car patents in ...
Lerner Zhang's user avatar
3 votes
2 answers
135 views

What are possible solutions when promoting competition is not applicable?

Usually, more competition means lower prices and higher quality as less effective businesses go out of business. However, it appears that it's not always the case. When there're a lot of health ...
Sergey Zolotarev's user avatar
-1 votes
0 answers
47 views

Pricing Strategy for Product that Ships Across a Country

Not sure if this is the right place for this question. Assume I produce a grocery item that I want to sell across the country. If I sell my product to a grocery nearby, my shipping cost will be less ...
EconomicsNewbie's user avatar
1 vote
0 answers
30 views

Is there evidence that non-profits might have a tax or other competitive advantage in competing with for-profit corporations?

Lets say my non-profit's interest is to diminish co2 emissions in the city. Are there useful forms of putting that tax money for better use and gaining competitive advantage against other for-profit ...
Yos's user avatar
  • 11
2 votes
1 answer
934 views

Competitive vs complete and non-competitive vs incomplete marekts

The very insightful questions that arise, when someone studies micro foundation are the following: What is the difference between competitive and complete marekts? When we refer to the first is it ...
Nav89's user avatar
  • 488
7 votes
4 answers
5k views

Do companies have non compete agreements between each other?

Do companies also know for a better lack of words armistice? When searching for non compete agreements everything that comes up are agreements between companies and employees, but do whole companies ...
Hakaishin's user avatar
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0 votes
1 answer
60 views

Emergence of notion "primitive business" in the era of Industry 4.0 and globalization

It has always been the conventional wisdom that businesses should be fit to survive in the market competition, that only the best businesses can survive beyond horizon of several years, that survival ...
TomR's user avatar
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3 votes
1 answer
69 views

Why do some perfectly competitive, loss-making firms shutdown and others don't?

Question: Why do perfectly competitive, loss-making firms that have (AC>AVC>AR) shutdown but Firms that have (AC>AR>AVC) not shutdown? -Both of these types of firms are making a loss. How is it ...
Tom's user avatar
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4 votes
0 answers
57 views

Examples of Analysis of Competition in a Latent Product Characteristic Space

Competition between firms offering heterogenous products is often an exercise of constructing the right kind of spatial model. There is the famous Hotelling model and many other papers that model ...
Pburg's user avatar
  • 2,218
5 votes
1 answer
112 views

Intermediate Case of Bertrand and Cournot

I am wondering whether there is a model of oligopolies in which we have some intermediate case of Bertrand and Cournot competition. What I do not mean by "intermediate" is the mixed Bertrand - Cournot ...
HRSE's user avatar
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1 vote
0 answers
74 views

Cournot competition subgame perfect Nash equilibrium with two products

QUESTION: Assume there are two types of products, labelled $l$ and $n$. Firms compete in the market by choosing which product to sell and then choosing the quantities. Let $Q_n$ and $Q_l$ denote the ...
elbarto's user avatar
  • 349
0 votes
1 answer
48 views

cournot competition with strategic consumers

I am not familiar with economics but does anybody know any reference about cournot competition with strategic consumers? In other words, is there any known competition where both producer and ...
KSH's user avatar
  • 11
2 votes
0 answers
57 views

Can State Owned Enterprises compete with each other without a private enterprise in a market? Examples

In a domestic market, there exist multiple (around 5) multi-product state-owned enterprises. In a few products, SOEs compete with private enterprises while in the majority of products, the SOEs share ...
user8467's user avatar
3 votes
0 answers
21 views

Are modern conglomerate mergers better or worse for economic competition?

Modern conglomerate mergers differ from those from decades ago as, even though they takeover smaller companies, they have a more narrow focus on related business and, in order to be successful, have ...
John Johnson's user avatar
4 votes
2 answers
633 views

What would you call a real market that is close to perfect competition?

I want to explain perfect competition to students using a few practical examples without going into much of the theory. But I want it to be theoretically accurate and I don't want to claim that those ...
Arthur Tarasov's user avatar
1 vote
1 answer
67 views

Is this market monopoly or duopoly?

Could you help me to identify monopoly, because I got confused. There is a company with market share of 54 %. The second one has market share of 21 %. Can this market be characterized as monopoly or ...
Mika's user avatar
  • 11