Monopoli Dan Dominasi Perusahaan

8/13/2019 Monopoli Dan Dominasi Perusahaan

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Slide 12005 South-Western Publishing

Oligopoli

Struktur pasar Oligopolistik

Pandangn Perusahaan

Konsekwensinya, setiap perusahan harus

mempertimbangkan reaksi pada rival pada harga,

produksi, atau keputusdan produksi

Reaksi ini saling berhubungan

Produk Heterogeneous atau Homogeneous

Contoh -- Pasar sepatu atlit Nike mempunyai pasar 47%

Reebok mempunyai pasar 16%

Dan Adidasmempunyai pasar 7%


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Slide 2

Nokias Keunggulan(Challenge) pada telepon

selluler

Pangsa pasar berubaha pada oligopolis. Pada thn1998,

pemimpin pasar pada telepon selularpada Motoroladengan

25% pangsa pasar dan Nokia second with 20%

Pada thn 2002, kepeimpina pasarberubah: Nokia 37% pasar

Motorola 17%

Selanjutnya, perubahan teknologi pada telepon, membawa

wireless web, photos, dan kecepatan teknologi G3

Perusahaan lain dan produk baru, seperti pada Dell, Palm,

NEC serta and Panasonic merupakan ancaman pada profitmargin Nokia

Nokia harus memutuskan pada teknologi 3G ke depan.

Pada perusahaan oligopoli memimipin tidak berarti memipin

jangka panjang


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Slide 3

Saling ketergantungan:

Cournot Oligopoli

Beberapa Models terikat pada asumsi

aksi rivalspada kepuutusan harga .

Augustin Cournot(1838) menemukansuatu model yang dasarnya Anti

kebijakan -trust di US.

Asumsi Relatif: ketergantungan pada rival

Membuat pemetaan gampang

Cournot


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Slide 4

A Numerical Example:Competition, Monopoly, and Cournot Oligopoly

IN COMPETITION P = MC, so 950 - Q = 50

PC= $50 and Q

M= 900

IN MONOPOLY MR = MC, so 950 -2Q = 50

QM= 450so PM= 950 - 450= $500

IN DUOPOLY

Let Q = q1+ q2

D

PMPcournot

PC

QM QCournotQC450 600 900

$500

$350

$50

Let:P = 950 - Q andMC =50


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Slide 5

Cournot Solusi:Case of 2 Firms (Duopoly)

Asumsi setiap perusahaan

memaksimumkan profit

Asumsi setiap perusahaan percaya tiakakan berubah output. Ini disebut : Asumsi Cournot

Dihitung setiap perusahaan pada MR =MC


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Slide 6

Let Q = q1+ q2

P = 950 - Q = 950 - q1- q2 dan MC = 50

TR1= Pq1= (950-q1-q2)q1 =950q1- q12 - q1q2

and TR2= Pq2= (950-q1-q2)q2 =950q2- q2q1- q2

2

SetMR1= MC & MR2= MC950 -2q1- q2= 50

950 - q1- 2q2= 50

2 equations &

2 unknowns


7/34Slide 7

With 2 Equations & 2 Unknowns:Solve for Output

950 -2q1- q2= 950 - q1- 2q2

So, q2= q1 Then plug this into the demandequation we find:

950 - 2q1 - q1= 950 - 3q1= 50.

Therefore q1=300 and Q=600

The price is: P= 950 - 600 = $350P Q

Competition 50 900

Cournot 350 600

Monopoly 500 450

Cournots

answer is

between the

other two.


8/34Slide 8

N-Firm Cournot Model

For 3 firms with linear demand andcost functions:

Q = q 1+ q 2 + q 3

In linear demand and costmodels, the solution is higher

output and lower price

QCournot= { N / (N+1) }QCompetition

QC

N

N

PC

THEREFORE, Increasing the

Number of Firmsincreasescompetition. This is the historical

basis for Anti-trust Policies


9/34Slide 9

Example: Cournot as N Increases

If N = 3 Triopoly

P = 950 - Q &MC=50

Then, Q = (3/4)(900)

Q = 675 P =$275

If N = 5

P = 950 - Q and MC= 50

Then Q = (5/6)(900)

Q = 750

P = $200

N = 3 N = 5


10/34Slide 10

Kollusion versus Competisi?

Kadang-kadang koolusi berhasil

Kadang-kadang kekuatan kompetisi

tindakan kolektif

Manakala kollusi sukses?

Ada 6 faktor mempengaruhi suksesnyakolluisi:


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Factors Affecting Likelihood of Successful Collusion

1. NumberandSize Distribution of Sellers. Collusion ismore successful with few firms or if there exists a dominant firm.

2. Product Heterogeneity. Collusion is more successful withproducts that are standardized or homogeneous

3. Cost Structures. Collusion is more successful when thecosts are similar for all of the firms in the oligopoly.

4. Sizeand Frequency of Orders. Collusion is moresuccessful with small, frequent orders.

5. SecrecyandRetaliation. Collusion is more successfulwhen it is difficult to give secret price concessions.

6. Percentage of External Orders. Collusion is moresuccessful when percentage of orders outside of the cartel is

small.


12/34Slide 12

Oligopolies & Incentives to Collude

When there arejust a few firms,

profits are

enhanced if all

reduce output

But each firm has

incentives tocheat by selling

more

MC MC

P

q

D

QM

incentive

to cutprice

MR

Representative firm Industry


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Examples of Cartels Ocean Shipping-- maritime exemption from US

Antitrust Laws

DeBeers-- diamonds

1950s Electrical Pricing Conspiracy-- GE,

Westinghouse, and Allis Chalmers

OPEC- oil cartel, with Saudi Arabia making up

33% of the groups exports

Siemens and Thompson-CSF-- airport radarsystems

NCAA- intercollegiate sports, also Major League

Baseball


14/34Slide 14

Kepemimipnan Harga

Barometric: One (or a few firms) sets the price

One firm is unusually aware of changes in cost or

demand conditions

The barometer firm senses changes first, or is the first

to ANNOUNCE changes in its price list

Find barometric price leader when the conditions

unsuitable to collusion & firm hasgood forecastingabilities or good management

B arom etric P rice L ead er D om in an t F irm P rice L ead er


15/34Slide 15

Barometric Price Leader Example:

Citibank & Prime Rate Announcements

Banking: 6,000 banks and

falling, but there are still many

banks. New York, center of Open

Market activities of the Fed

Reserve

Citibanks announcement

represents changes in interest

rate conditions to other banks

tolerably well.


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Slide 16

Dominant Firm Price Leadership

Dominant Firm: 40%share of market or more.

No price or quantity

collusion Dominant Firm (L) expects

the other firms (F) to

follow its price and

produce whereMC F= PL

DT

MC F

DL

Net Demand Curve: DL= DT- MCF

leadersdemand


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Slide 17

Find leaders

demand curve,

DL = (DT- MC F)

Find where

MRL= MCL

DT

MC F

DLMRL

Graphical Approach toDominant Firm Price Leadership


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Slide 18

At QL, find the

leaders price, PL Followers will

supply the

remainder of

Demand:(QT- QL) = QFD

MC F

DLMRL

MCL

PL

QL



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Slide 19

Followers will

supply theremainder of

Demand:

(QT- QL) = QF

D

MC F

DLMRL

MCL

PL

QL QT



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Slide 20

Implications ofDominant Firm Price Leadership

Market Share of the Dominant Firm Declines

Over Time

Entry expands MCF, and Shrinks DLand MRL Profitability of the Dominant Firm Declines

Over Time

Market Share of the Dominant Firm is

PROCYCLICAL

rises in booms, declines in recessions

TIME

profits

l E l f


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Slide 21

Numerical Example ofDominant Firm Price Leadership

Aerotek is the leader, with 6 other firms, given the following:

1. P = 10,00010 QTis the market demand

2. QT= QL+ QFis the sum of leader & followers

3. MCL = 100 + 3 QL and MCF= 50 + 2 QF

What is Aeroteks price and quantity? From 2 above, QL= QTQF and From 1, QT= 1,000 - .1P

Since followers sell at P=MC, From 3, P = 50 + 2 QF, which rearranged

to be QF= .5P - 25

So, QL= (1,000 - .1P)(.5P - 25) = 1,025 -.6 P, which can be

rearranged to be P = 1,708.31.67 QL

MRL= 1,708.33.34 QL

And MR L= MCLwhere: 1,708.33.34 QL= 100 + 3 QL

The optimal quantity for Aerotek, the leader is QL254

P = 1,708.31.67 QL = 1,708.31.67(254) $1,284.


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Slide 22

Historical Example:U.S. Steel (USX)

In early 1901 negotiations

among J. P. Morgan,

Elbert Gary, Andrew

Carnegie, and Charles M.

Schwab created UnitedStates Steel.

66% market share in

1901

46% market share by1920

42% share by 1925

profits in adominant firm

modelnormal

profits

profits

when

using a

lower price

Coke

ovensin. 1912

inGary, IN

Time


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Slide 23

Kinked Oligopoly Demand Curve

Belief in price rigidityfounded on experience of

the great depression

Price cuts lead toeveryone following

highly inelastic

Price increases, no onefollows

highly elastic

everyone

follows

price cuts

no one follows

a price increase

a kink at the price

P


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Slide 24

A Kink Leads to Breaks in the MR Curve

Although MC rises, theoptimal price remains

constant

Expect to find pricerigidity in markets with

kinked demand

QUESTION: Where would we morelikely find KINKS and

where NOT?

P

D

D

MR

MC2

MC1


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Slide 25

Which industries are likely to have kinks

and which have no kinks?

The GREATER the number of

firms, likely more kinked

Prices Likely More Rigid

The more

HOMOGENEOUS, likely

more kinked

Prices More Rigid

N = 10

N = 2

homogeneous

heterogeneous

E i i l E id


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Slide 26

Empirical Evidencevs.

Predictions of the Model

Oligopolies with few

firms were more rigid

in FACT

Oligopolies with

homogeneous products

were MORErigid in

FACT 2 2

N

prediction

FACT

heterogeneous homogeneous

prediction

FACT


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Slide 27

Are these Empirical Findings Surprising?

A kink is a barrier to profitability Firms are in business to make profits and

avoid barriers.

Simple Alternative Explanations Exist: More firms are more competitive

More homogenous products act more

competitively

Collusion leads firms to fix prices. The rigid

prices seen in oligopolies are signs of collusion.


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Slide 28

Price Rigidities andEmployment Impacts

Price rigidity will make business downturns

worse

Employment will be more volatile over the

business cycle if there are price rigidities

D BOOMSD BUSTS

A rigid price

OUTPUT

if price changes

with shifts in demand

Q3 Q2 Q1


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Slide 29

Oligopolistic Rivalry & Game Theory John Von Neuman & Oskar Morgenstern--

Game Theory used to describe situations where individuals

or organizations have conflicting objectives

Examples: Pricing of a few firms, Strategic Arms Race,

Advertising plans for a few firms, Output decisions of an

oligopoly

Strategy--is a course of action

The PAYOFFis the outcome of the strategy.

Listing of PAYOFFS appear in a payoff matrix. A Strategy Gameinvolves decisions with

consciously interdependent behavior of two or more

participants.

T P G


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Slide 30

Two Person GameTable 12. 4 page 537

Each player knows his andopponents alternatives

Preferences of all players are known

Single period game

Each player can invade the territoryof the other (Maraude) or Guard his

own territory Kahns payoff is given first,

Randles payoff is second.

Randle ranks Guard above Maraude.

Randle has a Dominant Strategy: adecision that maximizes welfare

independent of the other playersstrategy choice

Knowing what Randle will do, Kahndecides to Guard as well.

An Equilibrium--none of theparticipants can improve their

payoff

ASSUMPTIONS

Randle

Kahn

Guard

Maraude

Guard Maraude

Better, 1st Worst, 4th

Worse,2nd Best, 3rd

We will get to{Guard, Guard}which is an Equilibrium


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Slide 31

Six or Seven Territories?Table 12.5 on page 538

Sharp and Xeroxcompete in copiers.Payoffs for Xerox are inthe lower triangle

The payoffs depend onthe number of territoriesin which they compete

Sharp has a dominantstrategyof 6 territories.

What should Xerox do? We see we get to {6, 6}

as the iterated dominatestrategy.

Sharp

Xerox

6 territories 7 territories6territ

ories

7terr

itories

$40 $70 $35 $55

$30 $60 $45 $45


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Slide 32

Other Strategic Games

These are viewed as single period, but businessestend to be on-going, or multi-period games

These are two-person games, but oligopolies often

representN-person games, where N is greater than 2 Some games are zero-sum gamesin that what one

player wins, the other player loses, like a game ofpoker

Other games are non-zero sum gameswhere thewhole payoffs depend on strategy choices by all

players.

Th P i Dil


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Slide 33

The Prisoners Dilemma Often the payoffs vary

depending on the

strategy choices

The Prisoners

Dilemma

Two suspects arecaught & held

separately

Their strategies are

either to Confess (C) orNot Confess (NC)

a one period game

Suspect 1 in lower

triangle (Bold Red)

Noncooperative Solution

both confess: {C, C}

Cooperative Solution

both do not confess {NC,NC}

Off-diagonal represent a Double

Cross

suspect 2

suspect 1NC

C

NC C1 yr 0 yrs

15 yrs 6 yrs

1 yr 15 yrs

0 yrs 6 yrs


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Paradox?

The Prisoners Dilemma highlights thesituation where both parties would be best off

it the cooperated

But the logic of their situation ends up with anon-cooperative solution

The solutionto cooperation appears to be

transforming a one-period game into a multi-

period game.

The actions you take now will then have

consequences in future periods.

Monopoli Dan Dominasi Perusahaan

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