【正文】 183 174 165 155 106 89 73 58 43 28 15 2 56 37 19 2 15 31 47 62 44 25 6 12 29 46 62 78 52 32 15 3 20 36 52 68 70 51 34 18 1 14 30 44 93 76 59 44 28 13 1 15 118 102 87 72 57 44 30 17 Competitor’s (Equal) Prices ($) PG’s Price ($) 67 Chapter 1 ? What Do You Think? 1) Why would each firm choose a price of $? Hint: Think Nash Equilibrium 2) What is the profit maximizing price with collusion? A Pricing Problem for Procter Gamble 68 Chapter 1 Competition Versus Collusion: The Prisoners’ Dilemma ? Why wouldn’t each firm set the collusion price independently and earn the higher profits that occur with explicit collusion? 69 Chapter 1 ? Assume: 16$ 6$ :C o l l u s i o n12$ 4$ :mEq u i l i b r i uNa s h 212 :d e m a n d s239。 F i r m0$ a n d 20$1221??????????????PPPPQPPQVCFCCompetition Versus Collusion: The Prisoners’ Dilemma 70 Chapter 1 ? Possible Pricing Outes: ? ?? ? 4$204)6)(2(12)6( 20 20$206)4)(2(12)4( 20 4$ 6$ $ 16 6$ :2 Fi r m 6$ :1 Fi r m111222???????????????????QPQPPPPP???Competition Versus Collusion: The Prisoners’ Dilemma 71 Chapter 1 Payoff Matrix for Pricing Game Firm 2 Firm 1 Charge $4 Charge $6 Charge $4 Charge $6 $12, $12 $20, $4 $16, $16 $4, $20 72 Chapter 1 ? These two firms are playing a noncooperative game. ? Each firm independently does the best it can taking its petitor into account. ? Question ? Why will both firms both choose $4 when $6 will yield higher profits? Competition Versus Collusion: The Prisoners’ Dilemma 73 Chapter 1 ? An example in game theory, called the Prisoners’ Dilemma, illustrates the problem oligopolistic firms face. Competition Versus Collusion: The Prisoners’ Dilemma 74 Chapter 1 ? Scenario ? Two prisoners have been accused of collaborating in a crime. ? They are in separate jail cells and cannot municate. ? Each has been asked to confess to the crime. Competition Versus Collusion: The Prisoners’ Dilemma 75 Chapter 1 5, 5 1, 10 2, 2 10, 1 Payoff Matrix for Prisoners’ Dilemma Prisoner A Confess Don’t confess Confess Don’t confess Prisoner B Would you choose to confess? 76 Chapter 1 Payoff Matrix for the P G Prisoners’ Dilemma ? Conclusions: Oligipolistic Markets 1) Collusion will lead to greater profits 2) Explicit and implicit collusion is possible 3) Once collusion exists, the profit motive to break and lower price is significant 77 Chapter 1 Charge $ Charge $ Charge $ Unilever and Kao Charge $ PG $12, $12 $29, $11 $3, $21 $20, $20 Payoff Matrix for the PG Pricing Problem What price should P G choose? 78 Chapter 1 Implications of the Prisoners’ Dilemma for Oligipolistic Pricing ? Observations of Oligopoly Behavior 1) In some oligopoly markets, pricing behavior in time can create a predictable pricing environment and implied collusion may occur. 79 Chapter 1 ? Observations of Oligopoly Behavior 2) In other oligopoly markets, the firms are very aggressive and collusion is not possible. ?Firms are reluctant to change price because of the likely response of their petitors. ?In this case prices tend to be relatively rigid. Implications of the Prisoners’ Dilemma for Oligipolistic Pricing 80 Chapter 1 The Kinked Demand Curve $/Q Quantity MR D If the producer lowers price the petitors will follow and the demand will be inelastic. If the producer raises price the petitors will not and the demand will be elastic. 81 Chapter 1 The Kinked Demand Curve $/Q D P* Q* MC MC’ So long as marginal cost is in the vertical region of the marginal revenue curve, price and output will remain constant. MR Quantity 82 Chapter 1 Implications of the Prisoners’ Dilemma for Oligopolistic Pricing ? Price Signaling ? Implicit collusion in which a firm announces a price increase in the hope that other firms will follow suit Price Signaling Price Leadership 83 Chapter 1 Implications of the Prisoners’ Dilemma for Oligopolistic Pricing ? Price Leadership ? Pattern of pricing in which one firm regularly announces price changes that other firms then match Price Signaling Price Leadership 84 Chapter 1 Implications of the Prisoners’ Dilemma for Oligopolistic Pricing ? The Dominant Firm Model ? In some oligopolistic markets, one large firm has a major share of total sales, and a group of smaller firms supplies the remainder of the market. ? The large firm might then act as the dominant firm, setting a price that maximized its own profits. 85 Chapter 1 Price Setting by a Dominant Firm Price Quantity D DD QD P* At this price, fringe firms sell QF, so that total sales are QT. P1 QF QT P2 MCD MRD SF The dom