HAT Manifesto Part 1/3 - Rubric Cube - 250803 edit

 

Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.

PART 5 Firm Behavior and the Organization of Industry

Chapter 17 of 36 - Oligopoly

Section 21 of 21

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Oligopolies want to act like monopolies and maximize profits.

See Tables 3 and 4 for lists of similarities and differences.

But self-interest pushes oligopolies toward competition and less profits.

Where oligopolies end up on the competition-monopoly spectrum depends on the number of firms in the oligopoly and how cooperative the firms are.

Game theory including the prisoners' dilemma shows why oligopolies can fail to maintain cooperation despite cooperation being in their best interest.

One way policymakers regulate the behavior of oligopolists is through antitrust laws.

The efficiency and scope of these laws is the subject of ongoing controversy.

Price fixing among competing firms reduces economic welfare and is mostly illegal.

Some business practices that appear to reduce competition have legitimate and beneficial purposes and actually benefit consumers.

(End of chapter 17 of 36 and part 5).

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Congratulations! 47% (17 of 36 chapters) of way to becoming competent economist.