Chapter 9 - Oligopoly. Chapters 7 and 8 present overviews of perfect competition and pure monopoly. Chapter 9 examines the case of oligopoly and provides a rich treatment of competitive strategy.
Chapter Nine Oligopoly Copyright © 2015 John Wiley & Sons, Inc. All rights reserved It is in rare moments that I see my business clearly: my customers, my organization, my markets, and my costs. Then why do I still lie awake at night? I’m trying to figure out the damn strategies of my competitors! ~A Manager’s Lament Copyright © 2015 John Wiley & Sons, Inc. All rights reserved For Discussion Collusion in the InfantFormula Industry In the 1990s, the prices charged by the three largest infantformula suppliers were nearly identical and increased in lockstep Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Oligopoly FiveForces Framework Industry Concentration Concentration and Prices Business Behavior—Global Airfares Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Figure 9.1 The FiveForces Framework Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Quantity Competition A Dominant Firm Competition among Symmetric Firms Dueling Suppliers Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Figure 9.2 Optimal Output for a Dominant Firm Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Price Competition Price Rigidity and Kinked Demand Price Wars and the Prisoner’s Dilemma A Price War The Prisoner’s Dilemma Bertrand Price Competition When to Cut Price Copyright © 2015 John Wiley & Sons, Inc. All rights reserved 1.3 Figure 9.3 Optimal Output with Kinked Demand Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Other dimensions of competition Strategic Commitments Commitments Advertising Optimal Advertising Advertising within Oligopoly Collusion in the Infant Formula Industry Revisited Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Appendix to Chapter 9 BUNDLING AND TYING Bundling Films Mixed Bundling Tying Copyright © 2015 John Wiley & Sons, Inc. All rights reserved ... Copyright © 2015 John Wiley & Sons, Inc. All rights reserved For Discussion Collusion in the InfantFormula Industry In the 199 0s, the prices charged by the three largest infantformula suppliers were nearly identical and increased in lockstep... Collusion in the Infant Formula Industry Revisited Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Appendix to Chapter 9 BUNDLING AND TYING Bundling Films Mixed Bundling Tying Copyright © 2015 John Wiley & Sons, Inc. All rights reserved... Competition among Symmetric Firms Dueling Suppliers Copyright © 2015 John Wiley & Sons, Inc. All rights reserved Figure 9. 2 Optimal Output for a Dominant Firm Copyright © 2015 John Wiley & Sons, Inc. All rights reserved