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Transcript of Oligopoly Presentation
Big Screen TVs Ramon Cruise
Zach Perlman Outline Participating Firms Pricing Strategies Oligopoly benefits Conclusion Pricing Strategies References The assumptions: Identical firms. Panasonic - Incumbent Firm
First player to move
Olevia - Entrant Firm
Second to move Predatory Pricing
Also known as undercutting. Lower prices
Greater industry output
Larger consumer surplus The big screen TV industry is a key example of the Stackelberg Model of sequential game theory in price competition. Rational Firms
Equal Marginal Costs
Sequential Game -Stackelberg Model "The consumer really holds the Ace in this game." - Jonas Tenenbaums, Marketing Director - Samsung. Collusion
Firms work together and set the same high price and split the market. Price Matching
The second firm will chose to match the first firm's price. Darlin, Damon. "Falling Costs of Big-Screen TV's to Keep Falling." New York Times. N.p., 20 Aug. 2005. Web. 22 Feb. 2013.
Martin, Andrew. "TV Prices Fall, Squeezing Most Makers and Sellers". New York Times, 26 Dec. 2011. Web. 27 Feb. 2013.
"LG 50 Class Full HD 1080p Plasma Screen TV". Sears. 27 Feb, 2013. 50" TV prices over the past decade. The competitors: Who is part of this market? Their strategies: How does one affect the other? The outcome: Who benefits from this?