平狄克微观经济学monopolisticcompetitionandoligopoly(编辑修改稿)

平狄克微观经济学monopolisticcompetitionandoligopoly(编辑修改稿)内容摘要：

profit is twice as large as Firm 2’s Going first allows Firm 1 to produce a large quantity. Firm 2 must take that into account and produce less unless it wants to reduce profits for everyone. 169。 2020 Pearson Education, Inc. Chapter 12 42 Price Competition Competition in an oligopolistic industry may occur with price instead of output The Bertrand Model is used Oligopoly model in which firms produce a homogeneous good, each firm treats the price of its petitors as fixed, and all firms decide simultaneously what price to charge 169。 2020 Pearson Education, Inc. Chapter 12 43 Price Competition – Bertrand Model Assumptions Homogenous good Market demand is P = 30 Q where Q = Q1 + Q2 MC1 = MC2 = $3 Can show the Cournot equilibrium if Q1 = Q2 = 9 and market price is $12, giving each firm a profit of $81. 169。 2020 Pearson Education, Inc. Chapter 12 44 Price Competition – Bertrand Model Assume here that the firms pete with price, not quantity Since good is homogeneous, consumers will buy from lowest price seller If firms charge different prices, consumers buy from lowest priced firm only If firms charge same price, consumers are indifferent who they buy from 169。 2020 Pearson Education, Inc. Chapter 12 45 Price Competition – Bertrand Model Nash equilibrium is petitive output since have incentive to cut prices Both firms set price equal to MC P = MC。 P1 = P2 = $3 Q = 27。 Q1 amp。 Q2 = Both firms earn zero profit 169。 2020 Pearson Education, Inc. Chapter 12 46 Price Competition – Bertrand Model Why not charge a different price? If charge more, sell nothing If charge less, lose money on each unit sold The Bertrand model demonstrates the importance of the strategic variable Price versus output 169。 2020 Pearson Education, Inc. Chapter 12 47 Bertrand Model – Criticisms When firms produce a homogenous good, it is more natural to pete by setting quantities rather than prices Even if the firms do set prices and choose the same price, what share of total sales will go to each one? It may not be equally divided 169。 2020 Pearson Education, Inc. Chapter 12 48 Price Competition – Differentiated Products Market shares are now determined not just by prices, but by differences in the design, performance, and durability of each firm’s product In these markets, more likely to pete using price instead of quantity 169。 2020 Pearson Education, Inc. Chapter 12 49 Price Competition – Differentiated Products Example Duopoly with fixed costs of $20 but zero variable costs Firms face the same demand curves Firm 1’s demand: Q1 = 12 2P1 + P2 Firm 2’s demand: Q2 = 12 2P1 + P2 Quantity that each firm can sell decreases when it raises its own price but increases when its petitor charges a higher price 169。 2020 Pearson Education, Inc. Chapter 12 50 Price Competition – Differentiated Products Firms set prices at the same time 20212 20)212( 20$ :1 Fir m21211211111PPPPPPPQP169。 2020 Pearson Education, Inc. Chapter 12 51 Price Competition – Differentiated Products If P2 is fixed: 12212111413413041239。 PPPPPPP c u r v e r e a c t i o n s239。 F i r m c u r v e r e a c t i o n s139。 F i r m p r i c e m a x i m i z i n g p r o f i t s1 F i r m169。 2020 Pearson Education, Inc. Chapter 12 52 Nash Equilibrium in Prices What if both firms collude? They both decide to charge the same price that maximizes both of their profits Firms will charge $6 and will be better off colluding since they will earn a profit of $16 169。 2020 Pearson Education, Inc. Chapter 12 53 Firm 1’s Reaction Curve Nash Equilibrium in Prices P1 P2 Firm 2’s Reaction Curve $4 $4 Nash Equilibrium $6 $6 Collusive Equilibrium Equilibrium at price of $4 and profits of $12 169。 2020 Pearson Education, Inc. Chapter 12 54 Nash Equilibrium in Prices If Firm 1 sets price first and then Firm 2 makes pricing decision: Firm 1 would be at a distinct disadvantage by moving first The firm that moves second has an opportunity to undercut slightly and capture a larger market share 169。 2020 Pearson Education, Inc. Chapter 12 55 A Pricing Problem: Procter amp。 Gamble Procter amp。 Gamble, Kao Soap, Ltd., and Unilever, Ltd. were entering the market for Gypsy Moth Tape All three would be choosing their prices at the same time Each firm was using same technology so had same production costs FC = $480,000/month amp。 VC = $1/unit 169。 2020 Pearson Education, Inc. Chapter 12 56 A Pricing Problem: Procter amp。 Gamble Procter amp。 Gamble had to consider petitors’ prices when setting their price Pamp。 G’s demand curve was: Q = 3,(PU)(PK) Where P, PU, PK are Pamp。 G’s, Unilever’s, and Kao’s prices respectively 169。 2020 Pearson Education, Inc. Chapter 12 57 A Pricing Problem: Procter amp。 Gamble What price should Pamp。 G choose and what is the expected profit? Can calculate profits by taking different possibilities of prices you and the other panies could charge Nash equilibrium is at $ – the point where petitors are doing the best they can as well 169。 2020 Pearson Education, Inc. Chapter 12 58 Pamp。 G’s Profit (in thousands of $ per month) 169。 2020 Pearson Education, Inc. Chapter 12 59 A Pricing Problem for Procter amp。 Gamble Collusion with petitors will give larger profits If all agree to charge $, each earn profit of $20,000 Collusion agreements are hard to enforce 169。 2020 Pearson Education, Inc. Chapter 12 60 Competition Versus Collusion: The Prisoners’ Dilemma Nash equilibrium is a noncooperative equilibrium: each firm makes decision that gives greatest profit, given actions of petitors Although collus。