Econ 3057, 4438, 8038: Industrial Organisation

Problem set week 3

博弈论作业代写 1.Answer the following questions on the SSNIP test.(a) Describe the SSNIP (Small but Significant Non-transitory Increase in Prices) test.

1.  博弈论作业代写

Answer the following questions on the SSNIP test.

(a) Describe the SSNIP (Small but Significant Non-transitory Increase in Prices) test. What is the test for? What is the main idea behind the test? What is the standard procedure?

(b) What is the danger of using the current market prices for the SSNIP test? While the current market prices may not be appropriate for the test, would we end up with a too wide or too narrow market definition?

2.  博弈论作业代写

Consider a given market for product X. The total sales of all firms selling the product are $2 million. Ranking the firms’sales from highest to lowest, we find the top four firms’sales to be $260,000, $220,000, $150,000, and $130,000.

(a) Calculate the four firm concentration ratio (CR4).

(b) Suppose this is all the information we have. We do not have the information to work out the HHI (Herfindahl-Hirschman Index). Can you suggest an upper bound and a lower bound for the HHI?

3.  博弈论作业代写

Two parts in an automobile taillight are the plastic exterior cover and the light bulb. From our discussion of firms’vertical boundaries, which of these parts is a car company more likely to manufacture in-house? Why?

4.

Find all Nash equilibria (in pure and mixed strategies) in the following games.