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Definition
| actions and responses undertaken by competing firms |
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| anticipating rivals' actions in order to both revise a firm's plan and prepare to deal with rivals' response |
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Definition
| collective attempts between competing firms to reduce competition |
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| firms indirectly coordinate actions by signaling their intention to reduce output and maintain pricing above competitive levels |
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Definition
| firms directly negotiate output and pricing and divide markets |
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| An output- and price-fixing entity involving multiple competitors |
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Definition
| laws that outlaw cartels (trusts) |
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Term
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Definition
| In game theory, a type of game in which the outcome depends on two parties deciding whether to cooperate or defect |
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Definition
| a theory that studies the interactions between two parties that compete and/or cooperate with each other |
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Definition
| the percentage of total industry sales accounted for by the top four, eight, or twenty firms |
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| a firm that has a dominant market share and sets “acceptable” prices and margins in the industry |
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Definition
| sufficient resources possessed by a price leader to deter and combat defection |
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Term
| Industry characteristics and possibility of collusion |
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Definition
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Definition
| the overlap between two rivals’ markets |
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Definition
| firms engage the same rivals in multiple markets |
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Definition
| multi-market firms respect their rivals’ spheres of influence in certain markets, and their rivals reciprocate, leading to tacit collusion |
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Term
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Definition
| Retaliatory attacks on a competitor’s other markets if this competitor attacks a firm’s original market |
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Term
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Definition
| Government policy governing the rules of the game in competition |
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Term
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Definition
| Government policy designed to combat monopolies and cartels |
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Term
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Definition
| price setting by monopolists or collusion parties at a level higher than the competitive level |
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Term
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Definition
| an attempt to monopolize a market by setting prices below cost and intending to raise prices to cover losses in the long run after eliminating rivals |
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Term
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Definition
| an exporter selling goods below cost |
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Definition
| Laws that make it illegal for an exporter to sell goods below cost abroad with the intent to raise prices after eliminating local rivals |
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Term
| two criteria to determine if a dumping exists |
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Definition
-The product was sold below “fair market value”
-The dumping causes or threatens material injury to a competing US industry |
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Term
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Definition
| the extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm |
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Term
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Definition
| strategy that focuses on developing new markets (blue ocean) and avoids attacking core markets defended by rivals, which is likely to result in a bloody price war or a red ocean |
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Term
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Definition
| a set of actions in response to attack |
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Term
| three drivers for counterattacks |
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Definition
| (awareness, motivation, capabilities) |
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