New answers tagged


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 ...


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 ...


For a slightly different perspective and somewhat newer tools, I would suggest "Oligopoly Pricing: Old Ideas and New Tools" by Xavier Vives.


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 ...


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 ...


I would recommend the The theory of Industrial Organization and the Game Theory from Jean Tirole

Top 50 recent answers are included