平狄克微观经济学课件(英文)12.ppt

平狄克微观经济学课件(英文)12.ppt

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CHAPTER12OUTLINE,12.1MonopolisticCompetition12.2Oligopoly12.3PriceCompetition12.4CompetitionversusCollusion:

ThePrisonersDilemma12.5ImplicationsofthePrisonersDilemmaforOligopolisticPricing12.6Cartels,MonopolisticCompetitionandOligopoly,monopolisticcompetitionMarketinwhichfirmscanenterfreely,eachproducingitsownbrandorversionofadifferentiatedproduct.,oligopolyMarketinwhichonlyafewfirmscompetewithoneanother,andentrybynewfirmsisimpeded.,cartelMarketinwhichsomeorallfirmsexplicitlycollude,coordinatingpricesandoutputlevelstomaximizejointprofits.,MONOPOLISTICCOMPETITION,TheMakingsofMonopolisticCompetition,Amonopolisticallycompetitivemarkethastwokeycharacteristics:

1.Firmscompetebysellingdifferentiatedproductsthatarehighlysubstitutableforoneanotherbutnotperfectsubstitutes.Inotherwords,thecross-priceelasticitiesofdemandarelargebutnotinfinite.2.Thereisfreeentryandexit:

itisrelativelyeasyfornewfirmstoenterthemarketwiththeirownbrandsandforexistingfirmstoleaveiftheirproductsbecomeunprofitable.,MONOPOLISTICCOMPETITION,EquilibriumintheShortRunandtheLongRun,Becausethefirmistheonlyproducerofitsbrand,itfacesadownward-slopingdemandcurve.Priceexceedsmarginalcostandthefirmhasmonopolypower.Intheshortrun,describedinpart（a）,pricealsoexceedsaveragecost,andthefirmearnsprofitsshownbytheyellow-shadedrectangle.,AMonopolisticallyCompetitiveFirmintheShortandLongRun,Figure12.1,MONOPOLISTICCOMPETITION,EquilibriumintheShortRunandtheLongRun,Inthelongrun,theseprofitsattractnewfirmswithcompetingbrands.Thefirmsmarketsharefalls,anditsdemandcurveshiftsdownward.Inlong-runequilibrium,describedinpart（b）,priceequalsaveragecost,sothefirmearnszeroprofiteventhoughithasmonopolypower.,AMonopolisticallyCompetitiveFirmintheShortandLongRun,Figure12.1（continued）,MONOPOLISTICCOMPETITION,MonopolisticCompetitionandEconomicEfficiency,Underperfectcompetition,priceequalsmarginalcost.Thedemandcurvefacingthefirmishorizontal,sothezero-profitpointoccursatthepointofminimumaveragecost.,ComparisonofMonopolisticallyCompetitiveEquilibriumandPerfectlyCompetitiveEquilibrium,Figure12.2,MONOPOLISTICCOMPETITION,MonopolisticCompetitionandEconomicEfficiency,Undermonopolisticcompetition,priceexceedsmarginalcost.Thusthereisadeadweightloss,asshownbytheyellow-shadedarea.Thedemandcurveisdownward-sloping,sothezero-profitpointistotheleftofthepointofminimumaveragecost.,ComparisonofMonopolisticallyCompetitiveEquilibriumandPerfectlyCompetitiveEquilibrium,Figure12.2（continued）,Inbothtypesofmarkets,entryoccursuntilprofitsaredriventozero.Inevaluatingmonopolisticcompetition,theseinefficienciesmustbebalancedagainstthegainstoconsumersfromproductdiversity.,MONOPOLISTICCOMPETITION,WiththeexceptionofRoyalCrownandChockFulloNuts,allthecolasandcoffeesarequitepriceelastic.Withelasticitiesontheorderof4to8,eachbrandhasonlylimitedmonopolypower.Thisistypicalofmonopolisticcompetition.,OLIGOPOLY,TheMakingsofMonopolisticCompetition,Inoligopolisticmarkets,theproductsmayormaynotbedifferentiated.Whatmattersisthatonlyafewfirmsaccountformostoralloftotalproduction.Insomeoligopolisticmarkets,someorallfirmsearnsubstantialprofitsoverthelongrunbecausebarrierstoentrymakeitdifficultorimpossiblefornewfirmstoenter.Oligopolyisaprevalentformofmarketstructure.Examplesofoligopolisticindustriesincludeautomobiles,steel,aluminum,petrochemicals,electricalequipment,andcomputers.,OLIGOPOLY,EquilibriuminanOligopolisticMarket,Whenamarketisinequilibrium,firmsaredoingthebesttheycanandhavenoreasontochangetheirpriceoroutput.NashEquilibriumEquilibriuminoligopolymarketsmeansthateachfirmwillwanttodothebestitcangivenwhatitscompetitorsaredoing,andthesecompetitorswilldothebesttheycangivenwhatthatfirmisdoing.,NashequilibriumSetofstrategiesoractionsinwhicheachfirmdoesthebestitcangivenitscompetitorsactions.,duopolyMarketinwhichtwofirmscompetewitheachother.,OLIGOPOLY,TheCournotModel,CournotmodelOligopolymodelinwhichfirmsproduceahomogeneousgood,eachfirmtreatstheoutputofitscompetitorsasfixed,andallfirmsdecidesimultaneouslyhowmuchtoproduce.,Firm1sprofit-maximizingoutputdependsonhowmuchitthinksthatFirm2willproduce.IfitthinksFirm2willproducenothing,itsdemandcurve,labeledD1（0）,isthemarketdemandcurve.Thecorrespondingmarginalrevenuecurve,labeledMR1（0）,intersectsFirm1smarginalcostcurveMC1atanoutputof50units.IfFirm1thinksthatFirm2willproduce50units,itsdemandcurve,D1（50）,isshiftedtotheleftbythisamount.Profitmaximizationnowimpliesanoutputof25units.Finally,ifFirm1thinksthatFirm2willproduce75units,Firm1willproduceonly12.5units.,Firm1sOutputDecision,Figure12.3,5,OLIGOPOLY,TheCournotModel,reactioncurveRelationshipbetweenafirmsprofit-maximizingoutputandtheamountitthinksitscompetitorwillproduce.,CournotequilibriumEquilibriumintheCournotmodelinwhicheachfirmcorrectlyassumeshowmuchitscompetitorwillproduceandsetsitsownproductionlevelaccordingly.,Firm1sreactioncurveshowshowmuchitwillproduceasafunctionofhowmuchitthinksFirm2willproduce.Firm2sreactioncurveshowsitsoutputasafunctionofhowmuchitthinksFirm1willproduce.InCournotequilibrium,eachfirmcorrectlyassumestheamountthatitscompetitorwillproduceandtherebymaximizesitsownprofits.Therefore,neitherfirmwillmovefromthisequilibrium.,ReactionCurvesandCournotEquilibrium,Figure12.4,OLIGOPOLY,TheLinearDemandCurveAnExample,DuopolistsfacethefollowingmarketdemandcurveP=30QAlso,MC1=MC2=0Totalrevenueforfirm1:

R1=PQ1=（30Q）Q1thenMR1=R1/Q1=302Q1Q2SettingMR1=0（thefirmsmarginalcost）andsolvingforQ1,wefindFirm1sreactioncurve:

Bythesamecalculation,Firm2sreactioncurve:

Cournotequilibrium:

Totalquantityproduced:

OLIGOPOLY,TheLinearDemandCurveAnExample,Ifthetwofirmscollude,thenthetotalprofit-maximizingquantitycanbeobtainedasfollows:

Totalrevenueforthetwofirms:

R=PQ=（30Q）Q=30QQ2,thenMR=R/Q=302QSettingMR=0（thefirmsmarginalcost）wefindthattotalprofitismaximizedatQ=15.Then,Q1+Q2=15isthecollusioncurve.Ifthefirmsagreetoshareprofitsequally,eachwillproducehalfofthetotaloutput:

Q1=Q2=7.5,OLIGOPOLY,TheLinearDemandCurveAnExample,ThedemandcurveisP=30Q,andbothfirmshavezeromarginalcost.InCournotequilibrium,eachfirmproduces10.ThecollusioncurveshowscombinationsofQ1andQ2thatmaximizetotalprofits.Ifthefirmscolludeandshareprofitsequally,eachwillproduce7.5.Alsoshownisthecompetitiveequilibrium,inwhichpriceequalsmarginalcostandprofitiszero.,DuopolyExample,Figure12.5,OLIGOPOLY,FirstMoverAdvantageTheStackelbergModel,StackelbergmodelOligopolymodelinwhichonefirmsetsitsoutputbeforeotherfirmsdo.,SupposeFirm1setsitsoutputfirstandthenFirm2,afterobservingFirm1soutput,makesitsoutputdecision.Insettingoutput,Firm1mustthereforeconsiderhowFirm2willreact.P=30QAlso,MC1=MC2=0Firm2sreactioncurve:

Firm1srevenue:

AndMR1=R1/Q1=15Q1SettingMR1=0givesQ1=15,andQ2=7.5WeconcludethatFirm1producestwiceasmuchasFirm2andmakestwiceasmuchprofit.GoingfirstgivesFirm1anadvantage.,PRICECOMPETITION,PriceCompetitionwithHomogeneousProductsTheBertrandModel,BertrandmodelOligopolymodelinwhichfirmsproduceahomogeneousgood,eachfirmtreatsthepriceofitscompetitorsasfixed,andallfirmsdecidesimultaneouslywhatpricetocharge.,P=30QMC1=MC2=$3Q1=Q2=9,andinCournotequilibrium,themarketpriceis$12,sothateachfirmmakesaprofitof$81.NashequilibriumintheBertrandmodelresultsinbothfirmssettingpriceequaltomarginalcost:

P1=P2=$3.Thenindustryoutputis27units,ofwhicheachfirmproduces13.5units,andbothfirmsearnzeroprofit.IntheCournotmodel,becauseeachfirmproducesonly9units,themarketpriceis$12.Nowthemarketpriceis$3.IntheCournotmodel,eachfirmmadeaprofit;intheBertrandmodel,thefirmspriceatmarginalcostandmakenoprofit.,PRICECOMPETITION,PriceCompetitionwithDifferentiatedProducts,Supposeeachoftwoduopolistshasfixedcostsof$20butzerovariablecosts,andthattheyfacethesamedemandcurves:

Firm1sdemand:

Firm2sdemand:

ChoosingPricesFirm1sprofit:

Firm1sprofitmaximizingprice:

Firm1sreactioncurve:

Firm2sreactioncurve:

PRICECOMPETITION,PriceCompetitionwithDifferentiatedProducts,Heretwofirmsselladifferentiatedproduct,andeachfirmsdemanddependsbothonitsownpriceandonitscompetitorsprice.Thetwofirmschoosetheirpricesatthesametime,eachtakingitscompetitorspriceasgiven.Firm1sreactioncurvegivesitsprofit-maximizingpriceasafunctionofthepricethatFirm2sets,andsimilarlyforFirm2.TheNashequilibriumisattheintersectionofthetworeactioncurves:

Wheneachfirmchargesapriceof$4,itisdoingthebestitcangivenitscompetitorspriceandhasnoincentivetochangeprice.Alsoshownisthecollusiveequilibrium:

Ifthefirmscooperativelysetprice,theywillchoose$6.,NashEquilibriuminPrices,Figure12.6,PRICECOMPETITION,P&Gsdemandcurveformonthlysales:

AssumingthatP&Gscompetitorsfacethesamedemandconditions,withwhatpriceshouldyouenterthemarket,andhowmuchprofitshouldyouexpecttoearn?

COMPETITIONVERSUSCOLLUSION:

THEPRISONERSDILEMMA,Inourexample,therearetwofirms,eachofwhichhasfixedcostsof$20andzerovariablecosts.Theyfacethesamedemandcurves:

F