With example(s), explain cartels as collusive oligopolistic market. Discuss at least three circumstances under which cartels are most likely to be successful.Identify an oligopolistic industry in Ghana and describe its behavior in terms of number of firms, market share.Suppose Vobapine and Miton are two telecommunication firms that secretly collude to fix prices in a country. Each firm must decide whether to abide by the agreement or cheat on it. The payoff (profit in millions) matrix is given as: Abide by agreementCheat on itAbide by agreement20, 2012, 22Cheat on it22, 1214, 14 What strategy will each firm choose, and what will be each firm’s profit? What are the Nash equilibria Is this game an example of the prisoner’s dilemma? Explain

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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With example(s), explain cartels as collusive oligopolistic market. Discuss at least three circumstances under which cartels are most likely to be successful.

Identify an oligopolistic industry in Ghana and describe its behavior in terms of number of firms, market share.
Suppose Vobapine and Miton are two telecommunication firms that secretly collude to fix prices in a country. Each firm must decide whether to abide by the agreement or cheat on it. The payoff (profit in millions) matrix is given as:


	Abide by agreement	Cheat on it
Abide by agreement	20, 20	12, 22
Cheat on it	22, 12	14, 14

What strategy will each firm choose, and what will be each firm’s profit? What are the Nash equilibria

Is this game an example of the prisoner’s dilemma? Explain

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