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Economic Category:
Market Structure
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1.
Atoms Revisited - The Oligopoly Equivalence Theorem
Is an economy with atoms perfectly competitive or, more accurately, does it yield the same result we obtain in a perfectly competitive economy? The answer, it turns out, is a resounding "Yes!" -- under certain conditions on the size and character of the "atoms". This surprising "oligopoly equivalence" result was first unearthed by Michael J. Farrell (1970) in the context of a Debreu-Scarf replica economy and by Jean-Jaskold Gabszewicz and Jean-Francois Mertens (1971) and Benyamin Shitovitz (1973) in the Aumann continuum economy. [Details...]
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3.
Competition
Competition for scarce resources is the core concept around which all modern economics is built. This article examines how competition effects everyone in their day to day life in the economic world. [Details...]
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4.
History of the U.S. Telegraph Industry
The electric telegraph was one of the first telecommunications technologies of the industrial age. This article explains its invention and development throughout the years and at the end gives a timeline of those events. [Details...]
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5.
International Shipping Cartels
The international shipping industry has been characterized by a remarkable degree of collusion for more than a century. This article shows the attempts at collusion and the government's role and responsibility. [Details...]
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6.
Manufactured and Natural Gas Industry
The historical gas industry includes two chemically distinct flammable gasses. These are natural gas and several variations of manufactured coal gas. Both are explained in more detail throughout the course of the article. [Details...]
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7.
Monopoly
A monopoly is an industry in which there is one seller. Because it is the only seller, the monopolist faces a downward-sloping demand curve, the industry demand curve. This article explains whether a monopoly is desirable or not. [Details...]
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8.
Monopoly
This article defines monopoly and gives instances and example where a monopoly is present. [Details...]
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9.
Price Controls
This article explains how government uses price controls to set maximum or minumum prices that firms must charge. It also discusses why they are imposed when many problems arise from them. [Details...]
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10.
Rent Control
Rent control, like all other government-mandate price controls, is a law placing a maximum price, or a "rent ceiling," on what landlord may charge tenants. This article discusses the effects of rent control, effects on tenants, and possible solutions. [Details...]
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11.
Savings and Loan Industry (U.S.)
The savings and loan industry is the leading source of institutional finance for residential home mortgages in America. This article discusses the origins and the history thus far of this industry. [Details...]
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15.
Supply and demand Overview
Students are expected to gain an appreciation of the interaction of supply and demand. The behavior of producers is reflected in the upward sloping supply function and, consumer behavior is depicted with the downward sloping demand curve. A set of parameters may be used to specify shifts in these functions and, their impacts lead to different market outcomes.
The following list enumerates several specific subsidiary goals of this section:
determination of equilibrium price and quantity;
factors that shift the curves and;
the consequences of changes in supply and demand on equilibrium price and quantity.
[Details...]
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16.
Tutoial on Equilibrium analysis
In many aspects of economic analysis, we tend to assume that a condition of equilibrium exists with respect to key economic variables. Common examples include different models of market behavior known as Supply and Demand analysis. This tutorial helps to illuminate different concepts associated with the equilibrium analysis. [Details...]
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17.
Bertrand Price Competition Game
This program sets up a multi-person game in which each person chooses a price in a Bertrand game with linear demand and constant marginal cost. The game highlights severe competitive pressures when there are several sellers. [Details...]
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18.
Cournot Quantity Competition Game
This program sets up one or more markets in which each person is a seller who chooses a production quantity. This is a Cournot game with linear demand and constant marginal cost. The game can be used to motivate discussion of the Nash/Cournot predictions. There may be tacit collusion with few sellers and fixed matchings, and there may be severe competitive pressures when there are several sellers. [Details...]
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19.
Posted Offer Double Market
This program runs a one-sided auction in which sellers post prices independently on a take-it-or-leave-it basis at the start of each market period or "round." Buyers then place orders at the posted prices. The program collects and displays price information. The "admin" module calculates the theoretical competitive price for comparison. [Details...]
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20.
Verticle Monopoly Market
This program uses an interactive web-based interface to run a set of vertically related markets, as described in a 2003 discussion paper: "Double Monopoly: A Classroom Experiment," by Narine Badasyan, Jacob Goeree, Monica Hartmann, Charles Holt, John Morgan, Tanya Rosenblat, and Dirk Yandell. The first mover (wholesaler) in each group selects a wholesale price, and the second movers (retail monopolists in local markets) choose their whole purchase quantities and retail price levels. The equilibrium for vertically related monopolists produces a quantity restriction, even relative to a vertically integrated monopolist, and therefore, the vertical integration "solution" can be implemented in a second treatment option. A third treatment option lets the wholesaler set a wholesale price and a fixed franchise fee, which in theory, can also "solve" the vertical monopoly problem. [Details...]
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21.
Enterprise Restructuring in the former Soviet Union
Citizens of the countries of the former Soviet Union (FSU) have recognized the potential benefits, observed in many different cultures and societies around the world, of private, market-driven enterprises. For more than half a century enterprises in the FSU have been subject to comprehensive state ownership and central planning. Prices and financing were typically of little concern to enterprise management, while workers did not have to worry about job security and received a wide range of social benefits through enterprises. While moving toward private, market-driven enterprises offers great promise for an improved standard of living for the average person, such a transition represents a fundamental social, psychological, and economic challenge. [Details...]
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22.
Trade Network Game (TNG) and SimBioSys
The Trade Network Game (TNG) is a framework for studying the formation and evolution of trade networks among strategically interacting traders (buyers, sellers, and dealers) operating under variously specified market protocols. Successive generations of resource-constrained traders choose and refuse trade partners on the basis of continually updated expected utility, engage in trade interactions modelled as 2-person games, and evolve their trade strategies over time. The TNG framework permits evolutionary outcomes to be studied at four different levels: trader attributes (endogenous evolution of personality types); trade network formation (who is trading with whom, and with what regularity); expressed trade behavior (cooperative, predacious,...); and individual and social welfare measures (market efficiency, market power, individual utility levels,...). [Details...]
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24.
Duopoly-HMN
This is a configuration for a normal form game that
implements an experimental test of the prediction of
the Cournot-Nash duopoly model. [Details...]
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25.
ICV-Comp1-DA
This is a configuration for a MarketLink double auction
experiment that tests the predictions of the competitive
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Duop1-DA and ICV-Monop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]
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26.
ICV-Comp1-PO
This is a configuration for a MarketLink posted offer
experiment that tests the predictions of the competitive
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Duop1-PO and ICV-Monop1-PO so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]
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27.
ICV-Duop1-DA
This is a configuration for a MarketLink double auction
experiment that tests the predictions of the duopoly
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Comp1-DA and ICV-Monop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]
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28.
ICV-Duop1-PO
This is a configuration for a MarketLink posted offer
experiment that tests the predictions of the duopoly
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Comp1-DA and ICV-Monop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]
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29.
ICV-Monop1-DA
This is a configuration for a MarketLink double auction
experiment that tests the predictions of the monopoly
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Comp1-DA and ICV-Duop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]
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30.
ICV-Monop1-PO
This is a configuration for a MarketLink posted offer
experiment that tests the predictions of the monopoly
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Comp1-DA and ICV-Duop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]
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35.
PO 2
PO module configuration with 9 buyers and 9 sellers, 21 periods (90 seconds per period). [Details...]
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36.
A Search-Theoretic Classroom Experiment with Money
This classroom experiment promotes discussion of the social origins and characteristics of money. Students take the roles of traders who face a double coincidence of wants problem. As they recognize the benefits of overcoming trading frictions, students spontaneously begin using a consumption good as a medium of exchange. The setting comes from Duffy and Och's (1999) experimental version of the Kiyotaki-Wright (1989) search model of money. In the Kiyotaki-Wright (KW) environment, agents specialize in production, but consume a good other than their own product. Specialization combined with decentralized trading introduces the double coincidence of wants problem. In fact, no one could trade if each person held out for his consumption good. For trade to occur, at least some people must be willing to accept a good which they do not intend to consume, but which they hope to trade later for their consumption good. In other words, some people must be willing to accept a medium of exchange. When there exists an item generally accepted as a medium of exchange, then that item is money. Thus the KW setting captures money in its essential role as a medium of exchange. Here, using a medium of exchange reduces the cost of searching for a trading partner who has what you want and wants what you have. [Details...]
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37.
A Simple Game Theory Experiment for Teaching Oligopoly
For a number of years, I have been using a simple and brief classroom experiment to illustrate the power of game theory in explaining the behavior of oligopolists. The whole presentation takes about fifteen minutes of class time, and it has worked well in the Principles of Microeconomics course. [Details...]
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38.
A Simple Oligopoly Classroom Experiment
Classroom experiments can provide a stimulating experience for students who are being introduced to the ideas presented in a microeconomic principles course. The authors propose a classroom experiment on oligopoly that highlights the difference between a collusive and a competitive equilibrium. The exercise is similar to other oligopoly classroom games proposed with the exception that the game presented here is less time consuming for instructors and provides a list of suggested modifications that instructors can use to tailor the game to their specific educational needs. Empirical observations are also provided to give instructors an idea of how the classroom experiment works in practice and the range of actions that a typical undergraduate principles of microeconomics class are likely to exhibit. [Details...]
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39.
Economic Efficiency and the Role of Prices: Market Sessions for Use in Classrooms
In order to give economics students a better intuition for how an economy or a market works, exercises can be introduced directly into the classroom. The following three classroom games are designed to maintain student interest, promote involvement, and provide a way for the instructor to control the parameters of the game so that the outcomes directly relate to the basic concepts and lessons offered in the text. The concepts illustrated by the sessions are 1) the greater efficiency of resource allocation in a market economy as compared to a command economy, 2) the role of information in the efficient allocation of resources, and 3) that institutions matter.
[Details...]
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42.
Monopoly
Discussion on monopoly including profit, barriers to entry, regualted monopolies, and ineffeciency. [Details...]
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43.
Oligopoly
Discussion on the kinked demand curve, profit, collusive pricing, price leaders, restricted oligopolies, and progressive oligopolies. [Details...]
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