Why do you think that game theory has become the preferred method of analyzing oligopolistic markets? What advantages does it have over simply assuming, say, Cournot behavior?
Answer to relevant QuestionsWhat is adverse selection in insurance markets and how does it relate to the lemons model?In multi-division corporations where division heads are allocated an annual budget, explain why the “use-it-or-lose-it” “use-it-or-lose-it” phenomenon occurs and is a reflection of a prisoner’s dilemma.In the lemons model, there is only one price even though the products differ in quality. Why is that? What factors deter-mine that price? How does the price affect the quantities traded of the different quality goods?Compare the effects of a $ 1-per-unit excise subsidy when applied to a monopoly and to a competitive industry with the same cost and demand conditions. In which case will price fall more? In which case will output increase ...Studies find that controlling for other factors, university professors’ earnings tend to decline with experience. In other words, the more seniority a faculty member has with a particular institution, the lower his or her ...
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