Chapter Nine: Monopolistic Competition and Oligopoly
9.1 Characteristics of Monopolistic Competition (05:26)
This clip discusses the characteristics of monopolistic competition which encompasses features of both monopoly and perfect competition.
9.2 Monopolistic Competition: Limited Control over Price (01:24)
This clip explains why monopolistically competitive firms have some control over their product prices and why the extent of this control is quite limited.
9.3 Monopolistic Competition & Advertising (02:16)
This clip explains why monopolistically competitive firms tend to advertise their products heavily and discusses the effect of advertising on demand.
9.4 The Demand Curve Facing a Monopolistic Competitive Firm (02:03)
This clip distinguishes the demand curve facing a monopolistically competitive firm from the demand curves facing a monopoly and a perfectly competitive firm.
9.5 Short-run Profit under Monopolistic Competition (02:48)
This clip discusses the short-run profit maximization of a monopolistically competitive firm.
9.6 Long-run Profit Maximization under Monopolistic Competition (02:54)
This clip examines the long-run profit of a monopolistically competitive firm.
9.7 Productive and Allocative Efficiency under Monopolistic Competition (04:13)
This clip explores issues of productive and allocative efficiency under monopolistic competition.
9.8 Two Virtues of Monopolistic Competition (01:37)
This clip explores issues of product variety and product improvement under monopolistic competition.
9.9 Characteristics of Oligopoly (05:50)
This clip discusses the characteristics of oligopoly, including the extent of product differentiation, the ability to control price, the degree of mutual interdependence among firms, and the extent and types of entry barriers.
9.11 Game 1 - Elements of a Game (03:28)
This clip discusses the three elements of a game: the players, the strategies, and the payoffs. A hypothetical pricing game involving two airline companies is introduced.
9.12 Game 1 - The Payoff Matrix (07:27)
This clip presents the payoff matrix of the airline pricing game introduced earlier and shows how to use the payoff matrix to figure out firms’ strategic behaviors. The presentation also introduces the concept of dominant strategy.
9.13 Nash Equilibrium in Game 1 (03:18)
This clip introduces the concept of Nash equilibrium and shows that in Nash equilibrium no firm has an incentive to switch to a different strategy unilaterally.
9.15 Collusion and Incentive to Cheat (05:36)
Using a payoff matrix, this clip introduces the concept of collusion and shows why collusion is difficult to sustain in the real world.
9.16 Game 2 - An Asymmetrical Game (03:59)
This clip slightly modifies the airline pricing game introduced earlier to present an asymmetrical game in which only one firm has a dominant strategy. The presentation also shows how to identify the Nash equilibrium of the game.
9.17 Oligopoly & the Kinked Demand Model (08:24)
This clip introduces the kinked-demand model of oligopoly, discusses the price implication of the model, and presents the criticisms of the model.
9.17b Price Inflexibility under the Kinked Demand Model (04:23)
This clip further expands on clip 9.17 and focuses on the price implication of the kinked-demand model.
9.17c Criticisms of the Kinked Demand Model (01:20)
This clip expands on clip 9.17 and focuses on the criticisms of the kinked-demand model.
9.18 Collusion and Joint Profit Maximization (07:09)
This clip revisits the concept of collusion, distinguishing between overt and covert collusion, discussing how colluded firms can maximize their joint profit, and exploring several obstacles to collusion (beyond the antitrust laws).
9.19 Oligopoly & Advertising (02:36)
This clip explains why oligopolistic firms prefer to compete in advertising rather than in price cuts. The pros and cons of advertising are discussed from the viewpoint of society.
9.20 Productive & Allocative Efficiency under Oligopoly (03:22)
This clip discusses issues related to productive and allocative efficiency under Oligopoly.