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Oligopolistic firms must take into consideration the possible reactions of all competing firms and the firms' countermoves. [27] Every oligopolistic company with strong commodity homogeneity in its industry is reluctant to raise or lower prices, as competing firms will be aware of a firm's market actions and will respond appropriately.
Furthermore, because high-tech industries have an oligopolistic nature, they support only a small number of firms; the entry of new firms into the sector must cause other firms to exit. Thus, government policies that promote the creation of a successful industry in one country undermine the established industry in other countries. [8]
Oligopoly: If the industry structure is oligopolistic (that is, has few major competitors), the players will closely monitor each other's prices and be prepared to respond to any price cuts. [8] Applying game theory, two oligopolistic firms that engage in a price war will often find themselves in a kind of prisoner’s dilemma. Indeed, if Firm ...
Such competition would be otherwise known as quality competition where oligopolistic firms depend on their quality improvement intensities to survive. [5] In order to distinguish themselves well, these firms can compete in price, but more often, oligopolistic firms engage in non-price competition because of their kinked demand curve. In the ...
It is also called oligopolistic price coordination [6] or tacit parallelism. [ 7 ] A dataset of gasoline prices of BP , Caltex , Woolworths , Coles , and Gull from Perth gathered in the years 2001 to 2015 was used to show by statistical analysis the tacit collusion between these retailers. [ 8 ]
An oligopolistic reaction is a concept from economics introduced by Frederick T. Knickerbocker to explain why firms follow rivals into foreign markets. [ 1 ] [ 2 ] Under conditions of growth in an economy, US firms match the investments of competitors into that economy.
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Each of the companies runs a series of specialized imprints, which cater to different market segments and often carry the name of formerly independent publishers. Imprints create the illusion that there are many publishers, but imprints within each publisher co-ordinate to avoid competing with one another when they seek to acquire new books ...