Industrie Oekonomie 6.pdf

Industrial Organization Lecture Winter Semester 2009/2010 Prof. Dr. Werner B?nte Bergische Universit?t Wuppertal Fachbereich B Schumpeter School - of Business and Economics Bergische Universit?t Wuppertal Gau?stra?e 20 l42119 Wupperta | November 4, 2009 | Prof. Dr. Werner B?nte | Folie 1 | ? Introduction: Econometrics and Oligopoly Theory Time Schedule - October to November, 2009 ? Advanced Industrial Organization - November to December, 2009 ? Innovation: Theory and Policy - December 2009 to February, 2010 | November 4, 2009 | Prof. Dr. Werner B?nte | Folie 2 | Introduction to oligopoly theory ? introduction game theory ? basic oligopoly models | November 4, 2009 | Prof. Dr. Werner B?nte | Folie 3 | Introduction to oligopoly theory ? introduction game theory ? basic oligopoly models price competition quantity competition | November 4, 2009 | Prof. Dr. Werner B?nte | Folie 4 | Monopoly Perfect Competition Oligopoly Introduction to oligopoly theory MCp D MC Market- structure D MC D p p ? Q Q Number of suppliers one many several Q ? Decision rational, profit-maximizing - making non-strategically interactive/ strategically | November 4, 2009 | Prof. Dr. Werner B?nte | Folie 5 | Assumptions Monopoly ? Only one supplier, many buyers ? No quantity constraints ? One market price (no price discrimination) ? Market entry is impossible | November 4, 2009 | Prof. Dr. Werner B?nte | Folie 6 | Inverse demand function ( )P p X Monopoly Sales: ? ? ( )E X p X X ? ? ? Costs: P fit ? ? ? ? ? ? ? ? C X X E X C X ? ?ro : ? ? ?X | November 4, 2009 | Prof. Dr. Werner B?nte | Folie 7 | pMonopoly p Demand function Inverse demand function( )p X X X)( pX | November 4, 2009 | Prof. Dr. Werner B?nte | Folie 8 | Profit function: Monopoly ? ? ? ?max ( )X p X X C X? ? ? X First order condition: ? ? ? ? ? ? ? ? ! 0 d X dp X dC X p X X dX dX dX ? ? ? ? ? Marginal Revenue Marginal Cost ????????? ????? Second order condition: ? ?2 ( ) ( ) 0p X p X X C X? ? ? | November 4, 200