Problem Set 6

djamesmck57's version from 2016-04-05 03:18


Question Answer
oligopoly a state of limited competition, in which a market is shared by a small number of producers or sellers.
cournot competition an economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide on independently of each other and at the same time.
nash equilibrium concept of game theory where the optimal outcome of a game is one where no player has an incentive to deviate from his or her chosen strategy after considering an opponent's choice
Best Response Functionthe strategy (or strategies) which produces the most favorable outcome for a player, taking other players' strategies as given
Bertrand Paradoxsituation in which two players (firms) reach a state of Nash equilibrium where both firms charge a price equal to marginal cost ("MC")