New answers tagged industrial-organisation
4
One interpretation I can offer. The demand function can be expressed as:
$$Q_1 = Q_1(p_1,p_2)$$
Let us take the total differential:
$$dQ_1 = \frac{\partial Q_1(p_1,p_2)}{\partial p_1}dp_1+\frac{\partial Q_1(p_1,p_2)}{\partial p_2}dp_2$$
Assume that $Q_1$ remains unchanged with respect to a change in prices. This implies that $dQ_1=0$. Solving the ...
1
Both of them are consistent. The economic profit is the total revenue $TR$ minus total cost $TC$ but in economics costs must include also opportunity costs not just accounting ones.
However, for all standard market structures $TR>TC$ happens only if the marginal revenue or price $P$ is above marginal costs $MC$.
Also if there is positive economic ...
1
For a slightly different perspective and somewhat newer tools, I would suggest "Oligopoly Pricing: Old Ideas and New Tools" by Xavier Vives.
3
Your conjecture seems to be contradicted, at least for small values of $\sigma$.
You can draw the function with the following R-code:
qq_f = function(x,k,h,sig){
-pnorm(-k, sd=sig)*( (dnorm(h*(1-x), sd=sig))^2 ) - 0.5*dnorm(-k^2, sd=sig)*( 2*pnorm(h*(1-x), sd=sig) -1 )^2
}
curve(qq_f(x,k=0,h=1,sig=0.5),col='blue',xlim=c(-1,3),type='l',main="A ...
8
While taking Industrial Organization I remember working with:
Strategies and games: theory and practice by Dutta
Introduction to industrial organization by Cabral
Industrial organization: theory and applications by Shy
Industrial Organization: Markets and Strategies by Belleflamme and Peitz
The first two are rather introductory while third and forth are ...
3
I would recommend the The theory of Industrial Organization and the Game Theory from Jean Tirole
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