microeconomics Game Theory and Competitive Strategy参考.ppt

EQUILIBRIUM IN A COMPETITIVE FACTOR MARKET 14.2 During the Civil War, roughly 90 percent of the armed forces were unskilled workers involved in ground combat. Since then, however, the nature of warfare has evolved. Ground combat forces now make up only 16 percent of the armed forces. Meanwhile, changes in technology have led to a severe shortage in skilled technicians, trained pilots, computer analysts, mechanics, and others needed to operate sophisticated military equipment. EQUILIBRIUM IN A COMPETITIVE FACTOR MARKET 14.2 The Shortage of Skilled Military Personnel Figure 14.13 When the wage w* is paid to military personnel, the labor market is in equilibrium. When the wage is kept below w*, at w0, there is a shortage of personnel because the quantity of labor demanded is greater than the quantity supplied. FACTOR MARKETS WITH MONOPSONY POWER 14.3 Monopsony Power: Marginal and Average Expenditure Marginal and Average Expenditure Figure 14.14 When the buyer of an input has monopsony power, the marginal expenditure curve lies above the average expenditure curve because the decision to buy an extra unit raises the price that must be paid for all units, not just for the last one. The number of units of input purchased is given by L*, at the intersection of the marginal revenue product and marginal expenditure curves. The corresponding wage rate w* is lower than the competitive wage wc. FACTOR MARKETS WITH MONOPSONY POWER 14.3 Purchasing Decisions with Monopsony Power Bargaining Power A buyer with monopsony power maximizes net benefit (utility less expenditure) from a purchase by buying up to the point where marginal value (MV) is equal to marginal expenditure: For a firm buying a factor input, MV is just the marginal revenue product of the factor MRP. (14.6) The amount of bargaining power that a buyer or seller has is determined in part by the number of competing buyers and competing sellers. But it is also determined by the nature of the purchase itself. FA