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OLIGOPOLISTIC BEHAVIOR: Oligopolistic industries are nothing if not diverse. Some sell identical products, others differentiated products. Some have three or four firms of nearly equal size, others have one large dominate firm (a clear industry leader) and a handful of smaller firms (that follow the leader). Whatever products they may sell, and however they may be organized, oligopolistic industries share several behavioral tendencies, including (1) interdependence, (2) rigid prices, (3) nonprice competition, (4) mergers, and (5) collusion. In other words, each oligopolistic firm keeps a close eye on the decisions made by other firms in the industry (interdependence), are reluctant to change prices (rigid prices), but instead try to attract the competitors customers using incentives other than prices (nonprice competition), and when they get tired of competing with their competitors they are inclined to cooperate either legally (mergers) or illegally (collusion).
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HERFINDAHL INDEX A measure of concentration of the production in an industry calculated as the sum of the squares of market shares for each firm. This is one method of summarizing the degree to which an industry is oligopolistic and the concentration of market control held by the largest firms in the industry. Two other measures of industry concentration are the four-firm concentration ratio and the eight-firm concentration ratio.
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GRAY SKITTERY
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Today, you are likely to spend a great deal of time at a garage sale wanting to buy either 500 feet of coaxial cable or a coffee cup commemorating the 1960 Presidential election. Be on the lookout for telephone calls from former employers.
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The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
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"Aerodynamically, the bumblebee shouldn't be able to fly, but the bumblebee doesn't know it so it goes on flying anyway. " -- Mary Kay Ash, entrepreneur
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EER
European Economic Review
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