Question

Topic 1:​ In 1961 in a Philadelphia court, several of the nation’s most prestigious manufacturers(including GE, Westinghouse, Carrier and Allis Chalmers) were found guilty of price fixing in theelectrical equipment (transformers, switch gear, insulators, etc.) market. The products they wereselling were all very similar to one another.

1. Using Game Theory, first define a “Nash Equilibrium” and then describe the threemodels of oligopolistic behavior developed in the course, Counot, Stackelberg andBertrand. How is each different from and similar to the other two models? Andwhat market outcomes do they predict?

Answer 1

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