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Definition
| – actions and responses undertaken by competing firms |
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| – the process of anticipating rivals’ actions in order to both revise a firm’s plan and prepare to deal with rivals’ response |
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| – 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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| – 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
| – a theory that studies the interactions between two parties that compete and/or cooperate with each other |
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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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Term
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Definition
– the percentage of total industry sales accounted for by the top four, eight, or twenty firms
Few firms (high concentration ratio) > easier for collusion |
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Definition
– a firm that has a dominant market share and sets “acceptable” prices and margins in the industry
An industry price leader exists > easier for tacit collusion |
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Definition
– sufficient resources possessed by a price leader to deter and combat defection
Stronger capacity > collusion possible |
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Definition
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Definition
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Term
High market commonality (mutual
forbearance) |
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Definition
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Term
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Definition
| – the overlap between two rivals’ markets |
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Term
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Definition
| – firms engage the same rivals in multiple markets |
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Term
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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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Term
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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 in US |
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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
Surrogate Country for non-market economy |
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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
| – an initial set of actions to gain competitive advantage |
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Term
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Definition
| – a set of actions in response to attack |
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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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Definition
| is a prerequisite for counterattack |
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Term
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Definition
| – If the attacked market is of marginal value, managers may decide not to counterattack |
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Term
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Definition
| – Strong capabilities are needed to carry out counterattacks |
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