Line UMK G. E. Koroleva. Economy (10-11)

Economy

What is an oligopoly? Signs, characteristics, examples of oligopoly in the modern market

Oligopoly - fromother Greekὀλίγος “small” and πωλέω “I sell”, “trade”).

Signs of an oligopoly

1. There are several competing companies in the industry (therefore, it cannot be classified as an absolute monopoly). There is no exact number of companies representing an industry under an oligopoly. Often it ranges from 2 to 12.
2. Each oligopolistic firm has a significant degree of market control because it has a large share of the industry's total output. Moreover, if several oligopolists begin to implement a single market strategy, then their degree of influence will approach a pure monopoly.
3. For each particular firm, the demand curve has a falling character, which is why the industry cannot be fully competitive.
4. Every industry has at least one dominant oligopolistic firm that sets the playing field in the market. So, if it changes the price of a product or offers a new service, competitors must follow suit to avoid losing customers.
5. The higher the degree of concentration of production in the conduct of several firms, the lower the degree of competition in the industry.

Reasons for the emergence and existence of oligopolies

Often, oligopolies arise naturally when companies grow and begin to control a large part of the market, crowding out or absorbing competitors. In an oligopoly, firms often merge to increase market power. At the same time, consumers tend to trust larger and more famous manufacturers. Thus, gradually the number of companies offering specific products or services is reduced to a few large corporations.

The theoretical material included in the system of educational and methodological kits "Algorithm of Success" covers the economic concepts of the course of economics (basic level), systematizes their composition and relationships. The text is illustrated with diagrams, graphs, and statistical data on the Russian economy.

Types of oligopoly

• Homogeneous (undifferentiated) oligopoly
  The market is divided by several enterprises producing homogeneous products. That is, those products that do not have a variety of types and varieties (cement, oil, gas).
• Heterogeneous (differentiated) oligopoly
  A market situation in which firms present similar products characterized by an abundance of types, varieties, sizes, etc. (cars, metals, drinks).
• Oligopoly of dominance
  One company produces more than 60% of the industry's products, due to which it dominates the market. The remaining few firms share the remaining market share among themselves.
• Duopoly
  There are only two manufacturers of specific products on the market.

Pricing and sizing

Availability on the market different types oligopoly makes it impossible to develop a simple market model. This is hindered by the general interconnection of companies under an oligopoly. The company cannot predict the actions of competitors when its own strategy changes, and therefore cannot determine the price and volume of production to maximize profits.

There are several ways to control prices in an oligopoly.

1. Broken demand curve

Occurs when an oligopolist lowers prices below those set in the market, motivating competitors to do the same. However, as a result of such actions, there are no changes in either the price or the quantity of the product, which indicates the inflexibility of prices that characterize oligopolistic markets.

2. Conspiracy

This is the name of an informal (often tacit) agreement between firms to fix prices or limit competition. Collusive oligopolists seek to maximize total profits. However, this form of price control faces obstacles in the form of fraud through price discounts, differences in demand and costs, antitrust laws, and so on.

3. Leadership in prices

Price leadership is an informal price fixing method in which a dominant company announces a price change and follows suit. Keeping the price at the same level set by the leading firm is called the “price umbrella”.

4. Cost plus

The principle of "cost plus" or "cost plus" is the traditional way of setting prices under an oligopoly. In this case, the price is determined on the basis of the full cost of the product by adding some margin to it. This method is quite compatible with collusion or price leadership.

Toolkit, which is part of the system of educational and methodological kits "Algorithm of Success", is designed to help the teacher in organizing the teaching of the course of economics according to the textbook by G.E. Koroleva, T.V. Burmistrova (Moscow: Ventana-Graf, 2013). The manual contains the course program, thematic planning, questions of students' knowledge control, answers to the tasks of the workshop and the textbook on economics. In addition, the book reveals the features of the educational and methodological package on economics and the organization of the educational process. The topics covered are grouped according to the structure of the secondary standard. general education in economics for basic level. For each topic of the course, the objectives of the study, the composition of the studied economic concepts, the procedure for using the materials of the educational and methodological kit.

Oligopoly Efficiency

Oligopoly is a fairly common phenomenon in the modern market economy. There are two points of view about its effectiveness. According to the traditional point of view, an oligopoly is close to a monopoly with the external appearance of competition. Accordingly, an oligopoly can lead the market to the same consequences as a monopoly. However, I. Schumpeter and D.K. Galbraith argue that oligopoly promotes scientific and technological progress, as a result of which the consumer receives better products at lower prices than other types of market organization.

Properties of an oligopoly

• Market dominance by a small number of sellers oligopolists
• Very high barriers to entry into the industry
• To survive in long term, an oligopolistic firm does not have to produce differentiated products
• The decision of each firm affects the situation on the market, and at the same time depends on the decisions of other firms: when making a decision, the oligopolistic firm takes into account the possible reaction of other market participants. For this reason, in an oligopolistic market, the possibility of collusion is very high.
• A small number of goods-substitutes for the products of oligopolists
• An oligopolist can be both a price maker and a price taker in the market
• As a quantitative description of this form, the following ratio can be used - the share of the four leading firms in the industry should be more than 40%.

Universal Interdependence

Since there are a small number of firms in the market, sellers need to develop development strategies for their firm so that they are not forced out of the market by competitors. Since there are few firms in the market, companies closely monitor the actions of competitors, including their pricing policy who they work with, etc.

Broken demand curve model: point P(none) - if the firm sets the price of the product above this level, then competitors will not follow it

Price policy

The pricing policy of an oligopolistic company plays a huge role in her life. As a rule, it is not profitable for a firm to increase the prices of its goods and services, since it is likely that other firms will not follow the first one, and consumers will "pass" to a rival company. If the company lowers prices for its products, then in order not to lose customers, competitors usually follow the company that lowered prices, also reducing prices for the goods they offer: there is a “race for the leader”. Thus, so-called price wars often occur between oligopolists, in which firms set a price for their products that is no higher than that of a leading competitor. Price wars are often detrimental to companies, especially those that compete with more powerful and larger firms.

Cooperation with other companies

Some oligopolists act according to the principle "don't have a hundred rubles, but have a hundred friends." Thus, firms enter into partnerships with competitors such as alliances, mergers, conspiracies, cartels. For example, the air transportation oligopolist, Aeroflot, in 2006 entered into the Sky Team alliance with other global airlines, the oil-producing countries united in OPEC, often recognized as a cartel. An example of a merger between two companies is the merger of Air France and KLM. By uniting, firms become more powerful in the market, which allows them to increase output, change the price of their goods more freely and maximize their profits.

Game theory

Theories of oligopolistic pricing

To model the behavior of firms participating in the market in the theory of oligopoly, the methods of game theory are used. The most famous oligopoly models are:

• Gutenberg model
• Edgeworth model

Organizational and economic forms of concentration

• Cartel - a form of association, a public or tacit agreement between a group of similar enterprises in terms of sales volumes, prices and markets;
• Syndicate - a form of association of enterprises producing homogeneous products, organizes collective sales through a single trading network;
• A trust is a form of association in which the participants lose their production and financial independence.
• Consortium - a temporary association of enterprises on the basis of a common agreement for the implementation of a project;
• A conglomerate is an association of diversified firms. A high degree of autonomy and decentralization of management is usually maintained;
• Holding - a parent company that controls the activities of other companies, may not be engaged in production activities;
• A concern is an association of enterprises bound by common interests.

In the vast majority of countries in the world, the processes of business combinations are controlled by antitrust laws.

see also

Notes

Links

• BRANCHES OF IMPERFECT COMPETITION - 2.6 Oligopoly and its characteristics

Literature

• Nureev R. M., "Course of Microeconomics", ed. "Norma", 2005
• F. Musgrave, E. Kacapyr; Barron's AP Micro/Macroeconomics

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See what "Oligopoly" is in other dictionaries:

oligopoly- a market situation in which a small number of fairly large sellers opposes a mass of relatively small buyers, and each seller accounts for a significant part of the total supply on the market. Dictionary of financial terms. ... ... Financial vocabulary

Oligopoly- (oligopoly) A market in which a relatively small number of sellers serve many buyers. Every seller is aware that he can control his prices up to a certain level and that his profits will be affected by the behavior of his competitors... Glossary of business terms

oligopoly- (oligopoly) A situation in the market where there are several sellers, each of which evaluates the behavior of others. Each firm controls a fairly significant share of the market, given the individual reaction of other market participants to reduce their ... ... Economic dictionary

oligopoly- [Dictionary of foreign words of the Russian language

oligopoly- The state of the commodity market, in which a very limited number of operators, as a rule, large corporations, operate on it. Automotive markets are almost oligopolistic in all countries, since the number of car manufacturers is very ... ... Technical Translator's Handbook

oligopoly- (from oligo... and Greek poleo sell, trade), type market structure economy, in which several large firms, companies provide the vast majority of industry production and sales of products ... Modern Encyclopedia

oligopoly- (from oligo ... and Greek poleo I sell I trade), a term that denotes a market situation when several large competing firms monopolize the production and marketing of the bulk of products in the industry ... Big Encyclopedic Dictionary

oligopoly- (from Greek oligos small and poleo I sell) eng. oligopoly; German Oligopol. A type of market structure in which a few large competing firms monopolize the sale of the bulk of products in a given industry. see MONOPOLY. Antinazi. Encyclopedia ... Encyclopedia of Sociology

Oligopoly is a type of market imperfect competition characterized by the action of several sellers on the market, and the emergence of new ones is difficult or impossible.

If there are two producers in the market, then this type of market is called a duopoly, which is a special case of an oligopoly that is more common in theoretical models than in real life.

Signs of an oligopoly

Oligopolistic markets have the following features:

• a small number of firms and a large number of buyers. This means that the volume market supply is in the hands of a few large firms that sell the product to many small buyers;
• differentiated or standardized products. In theory, it is more convenient to consider a homogeneous oligopoly, but if the industry produces differentiated products and there are many substitutes, then this set of substitutes can be analyzed as a homogeneous aggregated product;
• the presence of significant barriers to entry into the market, i.e. high barriers to market entry;
• firms in the industry are aware of their interdependence, so price controls are limited.

Examples of an oligopoly

Examples of oligopolies include manufacturers of passenger aircraft such as Boeing or Airbus, car manufacturers, household appliances etc.

Another definition of an oligopolistic market would be a Herfindahl index value greater than 2000.

The pricing policy of an oligopolistic company plays a huge role in her life. As a rule, it is not profitable for a firm to increase the prices of its goods and services, since it is likely that other firms will not follow the first one, and consumers will "pass" to a rival company. If the company lowers prices for its products, then in order not to lose customers, competitors usually follow the company that lowered prices, also reducing prices for the goods they offer: there is a “race for the leader”.

Thus, so-called price wars often occur between oligopolists, in which firms set a price for their products that is not higher than that of a leading competitor. Price wars are often detrimental to companies, especially those that compete with more powerful and larger firms.

Oligopoly Models

Exist four models price behavior of oligopolists:

1. broken demand curve;
2. collusion;
3. leadership in prices;
4. cost-plus pricing principle.

The broken demand curve model was proposed by the American economist P. Sweezy in the 1940s. XX century, which analyzes the reaction of an oligopolist to a change in the behavior of their competitor. There are two types of reaction of market participants to price changes by an oligopolistic firm. In the first case, when a firm raises or lowers prices, competitors can ignore its actions and maintain the same price level. In the second case, competitors can follow the oligopolistic firm, changing prices in the same direction.

Conspiracy (cartel) when firms come to an agreement among themselves regarding prices, production volumes, sales.

Price leadership is a model in which oligopolists coordinate their behavior by tacitly agreeing to follow the leader.

Cost-plus pricing is a model associated with production and profit planning, in which the price of products is set according to the principle: average costs plus profit, calculated as a percentage of the level of average costs.

Similar articles

Monopsony is a situation where there is only one buyer and many sellers in the market.

If a monopoly is a certain phenomenon of controlling the market price by a monopolist firm, when only one seller acts, then in the case of a monopsony, the power over the price belongs to the single buyer.

Special merits in the study of this market belong to the English economist D. Robinson. It is generally accepted that the concept of "monopsony" was introduced into scientific circulation by D. Robinson, however, in his work " Economic theory imperfect competition” she refers to B.L. Halvard, who suggested this term to her.

Monopolistic competition is a type of market structure, consisting of many small firms producing differentiated products, and characterized by free entry into the market and exit from the market. The products of these firms are close, but not completely interchangeable, i.e. each of the many small firms produces a product that is somewhat different from that of its competitors.

Distinctive features of monopolistic competition

Through product differentiation, a monopolistic competitor reduces the price elasticity of demand. By raising the price, the monopolistic competitor does not lose all consumers, as happens in conditions of perfect competition. The market will shrink somewhat, but there will be those who consistently prefer the products of only this manufacturer.

The market is characterized by oligopolistic relations. Oligopoly in the economy is a kind of middle link that allows, on the one hand, to control everything largest enterprises and manage them, and on the other hand, create conditions for entering a competitive environment in the future. In any case, the topic is very relevant for Russia, because it is in our country that there are plenty of examples to study.

What is an oligopoly

Let us consider in more detail how this type differs from others. Oligopoly in market economy is a meeting point for a small number of manufacturers and many buyers. As a rule, the number of firms does not exceed 10-12 units. The most interesting thing is that oligopolistic market may have features of both monopolistic and competitive, depending on the behavior of its main participants.

You need to understand that when there are only a few large players on the market, they have only two behaviors: in the first, they cooperate and solve pricing issues together, and in the other, they compete and consider each other the worst enemies. In the first case, we are talking about "secret agreements", when the leaders over a cup of coffee or in a steam room simply agree on what kind of game to play. in the second model of behavior do not always benefit manufacturers, but reducing the cost of products or improving their quality attracts new potential customers.

Characteristic features of an oligopoly

Oligopolies in the modern economy have their own specific features. There are only a few of them:

1. There are only a few leading firms on the market. Usually they occupy approximately the same share in such a way that their power cannot be called a pure monopoly.

2. If we consider the graph, then the demand curve for each individual firm will have a falling character, from which we can conclude that the market is not competitive.

3. Home hallmark is that any action on the part of one of the manufacturers will not go unnoticed by competitors. If even the most important participant raises the price, its competitors will be forced to take similar actions or provoke demand for their products. At the same time, unlike in a competitive market, it is difficult to predict the behavior of buyers. An oligopoly in the economy is always an impetus to improve quality or reduce prices.

4. Often standardized products are produced in an oligopolistic market. Thus, manufacturers can only play price wars, since they cannot change the quality or type of products. At the same time, another subtype - differentiated oligopoly(for example, the automotive industry) - allows you to organize large-scale races between manufacturers for the attention of the consumer.

5. Any oligopoly can be characterized by the concentration of production. The higher the value of this indicator, the less competition in the market. The degree of concentration can be calculated using the Herfindahl-Hirschman index.

Features of entering the market

It is very difficult for young firms to enter a market in which there are only a few large manufacturers. And this is not surprising. Oligopolies in the Russian economy have firmly strengthened their status, and their names appear on an international scale. As a rule, all industries that can be called oligopolistic are those where there are limited resources, complex technologies, and large equipment.

It is clear that it will be very difficult for a young company not only to start operations, because this requires huge investments, but also to continue to work at a competitive level. When the name "Lukoil" is on everyone's lips, it will be difficult to surpass it. In world practice, there are only two examples of successful entry into the oligopolistic market of a new company. These are Volkswagen in the USA and AvtoVAZ in Russia. And then, it was possible only with the condition state support, so we are not talking about normal competition here.

Oil production market in Russia

The role of oligopolies in the modern Russian economy can be clearly seen in the example of the oil production market. This is one of the most striking examples of how a few major players can pursue a policy of "secret agreements".

To begin with, consider which firms appear on this market and what segment they occupy. For this we need the following figure.

As can be seen from this figure, only 11 Russian companies produce almost 90% of oil. Of these, four own a 60% stake. They become the biggest players, dictating their terms. Distribution production capacity in Russia is shown in the following figure.

What is really happening in the oil market

Oligopolies in the Russian economy, and in particular in the oil industry, behave like monopolists. In particular, there are vertically integrated systems that fully control the entire process from oil production, its refining and to sale to end consumers both on the external and internal markets.

As noted by the Antimonopoly Committee, the activity of the main players in this market is by no means transparent. Theoretically, the price of petroleum products should be formed under the influence of many external and internal factors, but in reality it is significantly overestimated, and, as calculations show, gasoline could cost 20% cheaper without harming producers. There is a conspiracy in which the main participants agree on a price and sell it on the domestic market.

Mobile operator market in Russia

If we consider the role of oligopolies in the modern Russian economy, then another good example shows the market mobile operators. Competition here has long ceased to be exclusively price. For the right to attract the attention of the buyer, real wars are fought, sometimes even

Consider what is the state of affairs and which players are in the lead.

As can be seen from the figure, the Big Three, which includes MTS, VimpelCom (Beeline) and MegaFon, hold the majority of the market. Recent times Tele 2 is increasing its turnover, although access to the most profitable sites in Moscow and St. Petersburg is still closed for it. As statistics show, for last year there is an outflow of customers from all operators by a few percent. At MTS the number of clients decreased by 0.1%, at MegaFon - by 0.3, and at Beeline - by as much as 2.6%.

How does oligopoly manifest itself in the market of cellular operators

The "Big Three" controls almost the entire market of cellular operators. New technologies such as 3G and 4G Internet are in their power. In principle, the place of the oligopoly in the modern Russian economy can be seen from the way the operators behave. In 2006, the "big three" were involved in a major scandal and were accused of conspiring against regional operators. It was during that period that a merger of some small companies or their complete disappearance was observed.

In 2010, the Antimonopoly Service fined the largest market leaders for deliberately inflating tariffs for the provision of roaming services. Each company was fined, which amounted to 1% of their revenue received for their actions. total amount FAS revenues amounted to 8.1 million rubles. One has only to calculate how many billions of rubles the companies themselves received.

"Big Three" and "Tele 2"

In 2006, the Swedish operator Tele 2 abruptly appears on the scene. It was formed back in 2001, but the persistent ones prevented it from settling in the central regions. Thanks to cunning manipulations with the shares of regional operators, in just one year, Tele 2 managed to secure competitive advantages in 13 regions. Further, the company pursued a very aggressive pricing policy, which allowed it to win back 4.3% of the market. It was a breakthrough that the main players in cellular communications could not fail to notice.

The "Big Three" began to interfere with "Tele 2" in every possible way, and completely non-competitive methods were used. So, a request was made to the Ministry of Internal Affairs from one deputy, after which all Tele 2 stations and offices began to be carefully checked to see if they were functioning correctly.

But the Swedish company did not back down and main goal outlined for itself the conquest of the Krasnodar Territory. The "big three" could not allow this, and they had to cut prices by one and a half times in order to adequately resist the competitor. This example clearly shows the role of oligopolies in the modern economy. We are not talking about fair competition at all, and if new company wants to survive and gain a foothold here, you need to have very strong support either from the state or from more influential companies.

Oligopoly and its place in a market economy

All economists agree on a single point of view: oligopolies are needed modern world and market economy. And although such a market is sometimes difficult to control, sometimes there are real wars against competitors, there are still positive sides to form a healthy economic system. Namely:

1. First of all, large firms have significant finances that can be directed to the development of the industry, scientific and technical developments.

2. It follows from the first point that since there is money and it is possible to invest in development, the product will become more profitable for the buyer, and thus, it is possible to bypass competitors. Oligopoly in the economy is the most powerful engine of progress.

3. In a realm where only giants exist, there is no such destructive power competition, as free market. Here are observed low prices and high quality products.

4. Another advantage is barriers to entry. Only well-funded firms can compete with leaders.

Disadvantages of oligopolies

Almost all the advantages are the negative aspects that arise in the realities of the modern economy.

Let's start with the fact that leading firms are completely unafraid of competitors and behave willfully, doing whatever they please. They confirm the legality of their actions by secret agreements so that others act in a similar way. By colluding, they play buyers, forcing them to buy low-quality products at a higher price. And people have no choice, because the oligopoly in the modern economy is akin to a monopoly: either buy or stay (for example) without gasoline.

Although oligopolies can influence scientific and technological progress, and only they can do this, large firms are in no hurry to introduce new technologies and invest in development. Everything is explained by the fact that, again, the company is in no hurry, because it knows: they will buy anyway. Until all the previously invested money is paid off, nothing new will develop.

Consequences of market oligopolization

The negative attitude towards monopoly and oligopoly in the economy is clearly unjustified. Perhaps this is due to the fact that in our country there is too much distrust and too many of those who want to profit from the money of ordinary people. But in fact, the big ones in one industry are needed by the economy.

First of all, it is connected with the scale of activity. This is reflected on fixed costs. For small firms, almost all costs are variable. But on large industries due to scale, you can save on the introduction of some new technologies. For example, the development of a new drug will cost $600 million, but these costs will be carried over for years until the problem is solved, and the costs can be added to the cost of already manufactured products, and the price will not change much.

Conclusion

Oligopoly in the economy is a very powerful tool for the development of scientific and technological progress. If you correctly direct the direction along which you need to move, then all the shortcomings and negative aspects observed in the current situation in our country will be hidden.

Competition dominated by only one or a few firms. Today, a good example is the passenger airliner market. It is almost impossible to compete with Airbus and Boeing. A similar situation has developed in the car market.

Basic concepts

Oligopoly is a state of the market where a small number of companies or brands compete for dominance. Undoubtedly, the leaders of the race are large firms, which have both higher authority and a well-developed PR campaign. The goods and services provided by the oligopoly market are similar to those of competitors. A striking example is Cell phones, washing powders, etc.

It is noteworthy that on modern markets there is practically no so-called price competition. Today, firms, on the contrary, are trying to become leaders in sales due to alternative species oligopoly. That is why it is extremely difficult for new participants to enter such a market. To enter the race for leadership, you must follow legal restrictions and have a huge initial capital for business development.

To enter an oligopoly, it is important to comply with a number of conditions. One of them is information content and openness. Any company is afraid of rash actions of competitors that can reduce its profits. Therefore, the subjects of the "alliance" are obliged to inform each other about possible changes and novelties. This consistency strengthens competitors, preventing other firms from taking leading positions. Such a vision of the situation is called strategic. At the same time, any changes in the activities of a competitor cannot be short-term.

At the moment there are 2 groups of oligopolies. The first is called cooperative. Consistency is the main point in it. The second group is non-cooperative. According to this strategy, competitors are fighting for market leadership with all possible ways. In addition, there are many oligopoly models. However, in reality, only a few of them are used.

Features of the cartel model

This is a kind of oligopoly based on collusion. Each market representative has the right to choose individual or cooperative behavior. Both strategies can be profitable in skillful hands. The advantages of the first kind of behavior are the possibility of concluding secret alliances, raising prices, etc.

Cooperative strategy allows you to collude with the most powerful competitors. As a result, companies jointly set prices, produce the same volumes of products, evenly divide the market, and jointly fight against various sanctions.

In this case, oligopoly is a powerful weapon in the fight against the crisis. Firms are not obliged to help each other, but all aspects related to products and services are strictly negotiated. Such oligopoly models are based on the strategy of a cartel (a group of companies that act in concert). This includes levers for managing prices, volumes, and product quality.

Price war model

In another way, the strategy is called Bertrand competition. This model was formulated by a French economist at the end of the 19th century. Here, oligopoly is competition based on the cost of products and services.

The model describes the price change strategy. The main law of Bertrand's theory is the appointment of the cost of goods, equal to the maximum cost in conditions of marginal competition.

For the model to be effective, the following sentences and conditions are required:

1. The market must consist of at least two large homogeneous companies.
2. Firms may behave inconsistently.
3. Under normal price competition, the demand function must be linear.
4. With the same cost of production, the profit of companies is comparable.
5. With a decrease in prices, the demand for goods and services rises markedly.
6. Regulation of the cost of production is based on the volume of production.

Price leadership model

There is only one company on the market, which sets the maximum barrier for the cost of production. Thus, the leading firm tries to increase its profits to the maximum possible. The remaining representatives of the market are only trying to catch up with the main competitor, while competing with each other. Here, an oligopoly is a series of non-cooperative companies, one of which completely controls the pricing of goods.

The leadership model is an integral part of a monopoly. When one firm controls both prices and profits, the others accept its terms of competition. In such a strategy, only large companies. Information content in this model is missing. Market dominance and a high level of demand are the main conditions for an oligopoly of leadership. At the same time, the production costs of large firms are always reduced to a minimum.

The concept of the Cournot model

The strategy is based on a market duopoly. It was proposed back in 1838 by the French philosopher and mathematician Antoine Cournot. This oligopoly model has a number of advantages. Production is strictly regulated, pricing is standardized, the quality of services depends on the technological equipment of the company. This strategy is also called healthy competition.

A duopoly is a market structure where there are only two sellers. They are protected from the emergence of new companies. Both competitors are manufacturers of the same type of product, but do not have common denominators. A duopoly clearly shows how one seller outperforms another in the struggle for leadership under equal market conditions.

The Cournot model assumes that competitors do not have complete information about each other's plans and actions.

Market Power Theory

This strategy is aimed at regulating and setting prices for products. The sources of market power are the availability of substitute goods, the elasticity of cross-demand, temporary fluctuations in growth rates, legal barriers, monopoly on certain resources, technological equipment of competitors.

The main indicators of the strategy are the percentage of sales to output, the sum of the squares of sales shares, the difference between prices and costs.

Such an oligopoly market is always controlled by legislation to prevent the emergence of monopoly power.