平狄克微观经济学Pricing with Market PowerPPT.ppt

Chapter 11 24 25 28 29 30 32 38 39 43 43 44 45 4 46 4 47 4 48 4 54 55 4 56 4 54 110 116 117 120 121 124 125 126 127 128 136 137 138 139 140 141 142 143 2 4 5 6 7 12 13 14 17 18 20 21 22 23 63 64 65 69 70 70 71 72 76 79 83 84 85 87 88 89 90 91 92 93 93 94 95 96 98 100 102 103 104 105 106 107 The Cartelization of Intercollegiate Athletics Large number of firms (colleges) Large number of consumers (fans) Very high profits The Cartelization of Intercollegiate Athletics NCAA is the cartel Restricts competition Reduces bargaining power by athletes – enforces rules regarding eligibility and terms of compensation Reduces competition by universities – limits number of games played each season, number of teams per division, etc. Limits price competition – sole negotiator for all football television contracts The Cartelization of Intercollegiate Athletics Although members have occasionally broken rules and regulations, has been a successful cartel In 1984, Supreme Court ruled that the NCAA’s monopolization of football TV contracts was illegal Competition led to drop in contract fees More college football on TV, but lower revenues to schools 2 4 5 13 15 16 23 25 27 30 34 34 35 36 36 36 36 36 36 46 50 51 51 52 54 55 56 57 58 A Pricing Problem for Procter Gamble Collusion with competitors will give larger profits If all agree to charge $1.50, each earn profit of $20,000 Collusion agreements are hard to enforce Competition Versus Collusion:The Prisoners’ Dilemma Nash equilibrium is a noncooperative equilibrium: each firm makes decision that gives greatest profit, given actions of competitors Although collusion is illegal, why don’t firms cooperate without explicitly colluding? Why not set profit maximizing collusion price and hope others follow? Competition Versus Collusion:The Prisoners’ Dilemma Competitor is not likely to follow Competitor can do better by choosing a lower price, even if they know you will set the collusive level price We can use example from before to better