Respuesta :
The Nash equilibrium in an oligopolistic market is generally worse for society than the outcome under collusion because the price is equal to marginal price.
What is Oligopoly?
- A market structure which has a small number of enterprises and none of which can prevent the others from having a large impact known as an oligopoly.
- The market share of the major companies is calculated using the concentration ratio.
- Basically, a market with a monopoly has just one producer, a duopoly has two businesses.
- An oligopoly has three or more businesses. Although there is no exact maximum limit to the number of businesses in an oligopoly.
- Mainly, there must be few enough that the decisions of one business have a big impact on the others.
What is Nash Equilibrium?
- The Nash equilibrium is the most popular technique in game theory to describe the outcome of a non-cooperative game involving two or more participants.
- Each player in a Nash equilibrium is considered to be aware of the equilibrium strategies of the other players, and changing one's own strategy will not benefit anyone.
- Nash Equilibrium shares its name with the mathematician John Forbes Nash Jr.
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