10/22/20141 Oligopoly Chapter 17

2 Outline Markets with Only a Few Sellers Markets with Only a Few Sellers The Economics of Cooperation The Economics of Cooperation Public Policy toward Oligopolies Public Policy toward Oligopolies Conclusion Conclusion

10/22/20143 Markets with Only a Few Sellers A duopoly example A duopoly example Competition, monopolies, and cartels Competition, monopolies, and cartels The equilibrium of an oligopoly The equilibrium of an oligopoly How the size of an oligopoly affect the market outcome How the size of an oligopoly affect the market outcome

10/22/20144 The Economics of Cooperation The prisoners’ dilemma The prisoners’ dilemma Oligopolies as a prisoners’ dilemma Oligopolies as a prisoners’ dilemma – OPEC and the world oil market Other examples of prisoners’ dilemma Other examples of prisoners’ dilemma – Arms race – Common resources

10/22/20145 The Economics of Cooperation The prisoners’ dilemma and the welfare of society The prisoners’ dilemma and the welfare of society Why people sometimes cooperate Why people sometimes cooperate – The prisoners’ dilemma tournament

10/22/20146 Public Policy toward Oligopolies Restraint of trade and the antitrust law Restraint of trade and the antitrust law – An illegal phone call Controversies Controversies – Resale price maintenance – Predatory pricing – Tying – The Microsoft case

10/22/20147 Conclusion