Term
Markets sometimes exhibit asymmetric information that leads to what?
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Definition
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Term
What is a method of differentiating products in the market?
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Definition
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Term
Who was an economist who illustrated "The Market For Lemons", and won a Nobel Prize in the year 2001?
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Definition
George Akerloff
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Term
Sellers know more about a product than who?
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Definition
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Term
When Buyers know less about a product than a Seller, how do Buyers feel?
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Definition
Unsure about the quality of a product, and are unwilling to offer higher prices.
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Term
What happens to the incentive to produce high-quality products if buyers are unwilling to offer higher prices?
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Definition
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Term
What happens to the market when the incentive to produce high quality products erodes?
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Definition
The market becomes full of bad low quality products.
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Term
How can sellers relay signals of quality?
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Definition
Brand Names
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Trademarks
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Testimonials
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Slogans
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Term
What are the characteristics of an Oligopoly?
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Definition
1.)There are very few firms. Firms act interdependently as a collusion.
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2.)The good can be a homogeneous or differentiated product.
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3.)Entry Barriers Exist
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Term
Can a collusion occur in an Oligopoly?
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Definition
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Term
Do firms act independently or interdependently in an Oligopoly?
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Definition
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Term
Are there many or few firms in an Oligopoly?
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Definition
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Term
Is the good/product in an Oligopoly, homogeneous, differentiated, or one or the other?
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Definition
One or the Other, Oligopolies can have either a homogeneous or differentiated product.
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Term
Are there very few homogeneous oligopolies or differentiated oligopolies?
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Definition
There are very few Homogeneous Oligopolies
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Term
Do oligopolies have existent entry barriers?
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Definition
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Term
When there are relatively few firms, it helps to promote what?
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Definition
Mutual Interdependence between firms
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Term
When pricing during collusion, it must be done with who in mind?
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Definition
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Term
When/where does game theory apply?
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Definition
To any situation in which individuals including firms make strategic choices and in which the outcome will depend on what every does, this is a "game".
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Term
What do all games have?
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Definition
Players, strategies, and pay-offs.
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Term
What do not all games have?
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Definition
An equilibrium outcome
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Term
What is Dominant Strategy?
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Definition
A strategy is a dominant strategy if it represents a player's strictly best response to any strategy the other player might select.
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Term
What does DSNE mean?
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Definition
Dominant Strategy Nash Equilibrium
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Term
Who is a still living, one of the best mathematicians ever, a pioneering game theorist, and Nobel prize winner?
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Definition
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Term
When each competing firm, earns a payoff, it reaches what?
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Definition
Nash Equilibrium
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Term
Ologopoly firms often have an incentive to what?
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Definition
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