Firms in these systems do not set prices independently, unlike in monopolistic competition.
A 1986 paper by Brander and Lewis pointed to the existence of a "limited liability effect" on financial structuring decisions within these systems. The categories of "strategic complements" and "strategic substitutes" were introduced in a 1985 paper about these systems by Bulow, Geanakoplos, and Klemperer. A 1964 article by George Stigler argues that variability of sales determines the level of cheating in these systems, and concludes that these systems don't need to be analyzed as separate cases. To solve a model of these systems, one uses backward induction to find the best response function of the (*) follower and then finds the point on that function that maximizes the payoff for the leader. That model of competition in these systems was developed by Heinrich von Stackelberg, and is similar to one developed by Cournot. Firms in these systems do not set prices independently, unlike in monopolistic competition. For 10 points, name these economic systems in which a market is dominated by a few sellers.
A 1986 paper by Brander and Lewis pointed to the existence of a "limited liability effect" on financial structuring decisions within these systems.
oligopolies [or oligopoly; accept duopoly or duopolies; prompt on answers such as "games" or "prisoner's dilemma"; do not accept or prompt on "monopoly," "monopolistic competition," or "monopsony."]