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Conjectural Variation
In oligopoly theory, conjectural variation is the belief that one firm has an idea about the way its competitors may react if it varies its output or price. The firm forms a conjecture about the variation in the other firm's output that will accompany any change in its own output. For example, in the classic Cournot model of oligopoly, it is assumed that each firm treats the output of the other firms as given when it chooses its output. This is sometimes called the "Nash conjecture," as it underlies the standard Nash equilibrium concept. However, alternative assumptions can be made. Suppose you have two firms producing the same good, so that the industry price is determined by the combined output of the two firms (think of the water duopoly in Cournot's original 1838 account). Now suppose that each firm has what is called the "Bertrand Conjecture" of −1. This means that if firm A increases its output, it conjectures that firm B will reduce its output to exactly offset firm A's inc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Oligopoly Theory
An oligopoly (from Greek ὀλίγος, ''oligos'' "few" and πωλεῖν, ''polein'' "to sell") is a market structure in which a market or industry is dominated by a small number of large sellers or producers. Oligopolies often result from the desire to maximize profits, which can lead to collusion between companies. This reduces competition, increases prices for consumers, and lowers wages for employees. Many industries have been cited as oligopolistic, including civil aviation, electricity providers, the telecommunications sector, Rail freight markets, food processing, funeral services, sugar refining, beer making, pulp and paper making, and automobile manufacturing. Most countries have laws outlawing anti-competitive behavior. EU competition law prohibits anti-competitive practices such as price-fixing and manipulating market supply and trade among competitors. In the US, the United States Department of Justice Antitrust Division and the Federal Trade Commission are ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cournot Model
Cournot competition is an economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide on independently of each other and at the same time. It is named after Antoine Augustin Cournot (1801–1877) who was inspired by observing competition in a spring water duopoly. It has the following features: * There is more than one firm and all firms produce a homogeneous product, i.e., there is no product differentiation; * Firms do not cooperate, i.e., there is no collusion; * Firms have market power, i.e., each firm's output decision affects the good's price; * The number of firms is fixed; * Firms compete in quantities rather than prices; and * The firms are economically rational and act strategically, usually seeking to maximize profit given their competitors' decisions. An essential assumption of this model is the "not conjecture" that each firm aims to maximize profits, based on the expectation that its own ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Nash Equilibrium
In game theory, the Nash equilibrium, named after the mathematician John Nash, is the most common way to define the solution of a non-cooperative game involving two or more players. In a Nash equilibrium, each player is assumed to know the equilibrium strategies of the other players, and no one has anything to gain by changing only one's own strategy. The principle of Nash equilibrium dates back to the time of Cournot, who in 1838 applied it to competing firms choosing outputs. If each player has chosen a strategy an action plan based on what has happened so far in the game and no one can increase one's own expected payoff by changing one's strategy while the other players keep their's unchanged, then the current set of strategy choices constitutes a Nash equilibrium. If two players Alice and Bob choose strategies A and B, (A, B) is a Nash equilibrium if Alice has no other strategy available that does better than A at maximizing her payoff in response to Bob choosing B, and Bo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Antoine Augustin Cournot
Antoine Augustin Cournot (; 28 August 180131 March 1877) was a French philosopher and mathematician who also contributed to the development of economics. Biography Antoine Augustin Cournot was born at Gray, Haute-Saône. In 1821 he entered one of the most prestigious Grandes Écoles, the École Normale Supérieure, and, according to Sandmo: in 1823 he took a license degree in mathematics at Sorbonne University. He then became the private secretary of a field marshal who required assistance in writing his memoirs. This position left Cournot with considerable time for his own pursuits. In the course of his ten years in the field marshal's employment he took two doctoral degrees, one in mechanics and one in astronomy. In addition, he published a number of articles and even acquired a degree in law. Subsequently, Cournot held positions as professor of mathematics, chief examiner for undergraduate students, and rector of Dijon Academy. By the time Cournot died in 1877, he wa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Marginal Cost
In economics, the marginal cost is the change in the total cost that arises when the quantity produced is incremented, the cost of producing additional quantity. In some contexts, it refers to an increment of one unit of output, and in others it refers to the rate of change of total cost as output is increased by an infinitesimal amount. As Figure 1 shows, the marginal cost is measured in dollars per unit, whereas total cost is in dollars, and the marginal cost is the slope of the total cost, the rate at which it increases with output. Marginal cost is different from average cost, which is the total cost divided by the number of units produced. At each level of production and time period being considered, marginal cost includes all costs that vary with the level of production, whereas costs that do not vary with production are fixed. For example, the marginal cost of producing an automobile will include the costs of labor and parts needed for the additional automobile but not th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Monopoly
A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a specific person or enterprise is the only supplier of a particular thing. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly and duopoly which consists of a few sellers dominating a market. Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit. The verb ''monopolise'' or ''monopolize'' refers to the ''process'' by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a busine ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Arthur Bowley
Sir Arthur Lyon Bowley, FBA (6 November 1869 – 21 January 1957) was an English statistician and economist who worked on economic statistics and pioneered the use of sampling techniques in social surveys. Early life Bowley's father, James William Lyon Bowley, was a minister in the Church of England. He died at the age of 40 when Arthur was one, leaving Arthur's mother as mother or stepmother to seven children. Arthur was educated at Christ's Hospital, and won a scholarship to Trinity College, Cambridge to study mathematics. He graduated as Tenth Wrangler. At Cambridge Bowley had a short course of study with the economist Alfred Marshall who had also been a Cambridge wrangler. Under Marshall's influence Bowley became an economic statistician. His ''Account of England's Foreign Trade'' won the Cobden Essay Prize and was published as a book. Marshall watched over Bowley's career, recommending him for jobs and offering him advice. Most notoriously Marshall told him the ''Elemen ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Ragnar Frisch
Ragnar Anton Kittil Frisch (3 March 1895 – 31 January 1973) was an influential Norwegian economist known for being one of the major contributors to establishing economics as a quantitative and statistically informed science in the early 20th century. He coined the term econometrics in 1926 for utilising statistical methods to describe economic systems, as well as the terms microeconomics and macroeconomics in 1933, for describing individual and aggregate economic systems, respectively. He was the first to develop a statistically informed model of business cycles in 1933. Later work on the model together with Jan Tinbergen won the two the first Nobel Memorial Prize in Economic Sciences in 1969. Frisch became dr.philos. with a thesis on mathematics and statistics at the University of Oslo in 1926''.'' After his doctoral thesis, he spent five years researching in the United States at the University of Minnesota and Yale University. After teaching briefly at Yale from 1930-31, h ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Game Theory
Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has applications in all fields of social science, as well as in logic, systems science and computer science. Originally, it addressed two-person zero-sum games, in which each participant's gains or losses are exactly balanced by those of other participants. In the 21st century, game theory applies to a wide range of behavioral relations; it is now an umbrella term for the science of logical decision making in humans, animals, as well as computers. Modern game theory began with the idea of mixed-strategy equilibria in two-person zero-sum game and its proof by John von Neumann. Von Neumann's original proof used the Brouwer fixed-point theorem on continuous mappings into compact convex sets, which became a standard method in game theory and mathem ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Evolutionary Game Theory
Evolutionary game theory (EGT) is the application of game theory to evolving populations in biology. It defines a framework of contests, strategies, and analytics into which Darwinian competition can be modelled. It originated in 1973 with John Maynard Smith and George R. Price's formalisation of contests, analysed as strategies, and the mathematical criteria that can be used to predict the results of competing strategies. Evolutionary game theory differs from classical game theory in focusing more on the dynamics of strategy change. This is influenced by the frequency of the competing strategies in the population. Evolutionary game theory has helped to explain the basis of altruistic behaviours in Darwinian evolution. It has in turn become of interest to economists, sociologists, anthropologists, and philosophers. History Classical game theory Classical non-cooperative game theory was conceived by John von Neumann to determine optimal strategies in competitions between adv ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Huw Dixon
Huw David Dixon (/hju: devəd dɪksən/), born 1958, is a British economist. He has been a professor at Cardiff Business School since 2006, having previously been Head of Economics at the University of York (2003–2006) after being a professor of economics there (1992–2003), and the University of Swansea (1991–1992), a Reader at Essex University (1987–1991) and a lecturer at Birkbeck College (University of London) 1983–1987. Education He graduated from his first degree in Philosophy and Economics from Balliol College, University of Oxford in 1980, and he went on to do his PhD at Nuffield College, University of Oxford under the supervision of Nobel Laureate Sir James Mirrlees graduating in 1984. Career Dixon was a fellow of the CEPR from 1991–2001, a member of the Royal Economic Society council (1996–2001), and a fellow of the Ces-ifo institute since 2000. He has been on the Editorial Board of the Review of Economic Studies (1986–1993), the Journal of Industr ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Meme
A meme ( ) is an idea, behavior, or style that spreads by means of imitation from person to person within a culture and often carries symbolic meaning representing a particular phenomenon or theme. A meme acts as a unit for carrying cultural ideas, symbols, or practices, that can be transmitted from one mind to another through writing, speech, gestures, rituals, or other imitable phenomena with a mimicked theme. Supporters of the concept regard memes as cultural analogues to genes in that they self-replicate, mutate, and respond to selective pressures. In popular language, a meme may refer to an Internet meme, typically an image, that is remixed, copied, and circulated in a shared cultural experience online. Proponents theorize that memes are a viral phenomenon that may evolve by natural selection in a manner analogous to that of biological evolution. Memes do this through the processes of variation, mutation, competition, and inheritance, each of which influences a meme ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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