Microeconomics

Microeconomics Question：Does collusion imply anti-competitiveness? Collusion or in" rel="nofollow">incentives to collude are known to be major strategies among oligopolists in" rel="nofollow">in order to improve their pay-offs. Formation of a cartel, biddin" rel="nofollow">ing rin" rel="nofollow">ings etc. are examples of this. Modern constitutional amendments like the Sherman Act and Clayton Act in" rel="nofollow">in the USA and the European Antitrust Regulation have set out high penalties for the detection of collusive activity. For example the British Airways was fin" rel="nofollow">ined about 55 million GBP for fuel surcharge fixin" rel="nofollow">ing with Virgin" rel="nofollow">in Atlantic two years ago. So a natural question arises, whether the assertion collusion is anti-competitive is in" rel="nofollow">indeed true and if it is then under what conditions and for what reason. So it is worth in" rel="nofollow">investigatin" rel="nofollow">ing this question in" rel="nofollow">in different settin" rel="nofollow">ing, esp. in" rel="nofollow">in price and quantity competin" rel="nofollow">ing oligopolies. Notes: This assignment is goin" rel="nofollow">ing to be a written essay (100%). As a structured step; (1) you will need to first analyse the outcome of a price settin" rel="nofollow">ing game without in" rel="nofollow">investment (2) Second, you will need to thin" rel="nofollow">ink about structure of the game when you in" rel="nofollow">include in" rel="nofollow">investment in" rel="nofollow">in (a) one-shot (b) fin" rel="nofollow">inite number of periods and (c) in" rel="nofollow">infin" rel="nofollow">inite number of periods. Understandin" rel="nofollow">ing a one-shot game well is the key to understandin" rel="nofollow">ing a repeated game well. Considerin" rel="nofollow">ing imperfect in" rel="nofollow">information about cost in" rel="nofollow">in this settin" rel="nofollow">ing will deserve extra credit. Use of backward/forward in" rel="nofollow">induction is essential in" rel="nofollow">in such games. Word Limit: 2500 words Learnin" rel="nofollow">ing Outcomes: • Apply optimization theory and game theory with specific use of repeated games with imperfect in" rel="nofollow">information. • Apply equilibrium analysis to this particular market. General Markin" rel="nofollow">ing Scheme Grade % Mark Requirements (Fail) 0 No answer has been attempted or evidence of unfair practice. 1 – 9 The work presented for assessment may be in" rel="nofollow">incomplete and/or irrelevant and demonstrates a serious lack of comprehension and/or engagement with the set task. Attain" rel="nofollow">inment of the learnin" rel="nofollow">ing outcomes is min" rel="nofollow">inimal and assessment criteria are not addressed. 10 – 19 Misunderstandin" rel="nofollow">ing or misin" rel="nofollow">interpretation of the set task, providin" rel="nofollow">ing a short and/or largely irrelevant response. Consequently, no learnin" rel="nofollow">ing outcomes are met in" rel="nofollow">in full although there may be min" rel="nofollow">inimal attain" rel="nofollow">inment in" rel="nofollow">in relation to one or two. 20 - 29 Min" rel="nofollow">inimal understandin" rel="nofollow">ing of the set task and will partially have met some of the learnin" rel="nofollow">ing outcomes. Little knowledge and understandin" rel="nofollow">ing of the field of study relevant to the task. Limited ability shown to communicate simple concepts and/or factual in" rel="nofollow">information. Significant difficulties in" rel="nofollow">in report’s structure and organisation detract from the clarity and meanin" rel="nofollow">ing overall. Evidence of in" rel="nofollow">individual readin" rel="nofollow">ing and in" rel="nofollow">investigation is negligible and the limited referencin" rel="nofollow">ing of literature and other sources is frequently in" rel="nofollow">inaccurate. Demonstrates some ability to describe and report but very little evidence is available to in" rel="nofollow">indicate an ability to engage in" rel="nofollow">in critical evaluation and reflection. No real evidence of lin" rel="nofollow">inkin" rel="nofollow">ing experiment’s results to economic theory. 30 – 39 Partial understandin" rel="nofollow">ing of the set task and some of the associated learnin" rel="nofollow">ing outcomes met at a basic level. Factual in" rel="nofollow">inaccuracies, errors and misconceptions are evident in" rel="nofollow">in important areas and elements of the assessed work may be irrelevant to the task. If attempted, the presentation of arguments and more complex ideas may be confused and clumsily expressed. Some enquiry and analysis relevant to the task attempted but outcomes may be naïve, simplistic and/or unconvin" rel="nofollow">incin" rel="nofollow">ing. Demonstrates limited knowledge of current research/scholarship in" rel="nofollow">in the disciplin" rel="nofollow">ine. A restricted range of sources are used but overall, there is an over-reliance on programme materials with little evidence of in" rel="nofollow">individual readin" rel="nofollow">ing and in" rel="nofollow">investigation. There are frequent errors in" rel="nofollow">in the referencin" rel="nofollow">ing of literature and other sources. The work is largely descriptive and arguments, if attempted, are rarely substantiated. Some weak evidence of lin" rel="nofollow">inkin" rel="nofollow">ing theory to the outcomes of the experiment. (Third) 40 - 49 Demonstrates a basic understandin" rel="nofollow">ing of the set task and an ability to have met the associated learnin" rel="nofollow">ing outcomes and addresses the assessment criteria at a threshold level. Displays a basic knowledge and understandin" rel="nofollow">ing of many aspects of the field of study relevant to the task. Reproduction of in" rel="nofollow">information received from elsewhere (e.g. programme materials). Errors and misconceptions will be evident but these are outweighed by the degree of knowledge and understandin" rel="nofollow">ing demonstrated overall. More success is achieved in" rel="nofollow">in describin" rel="nofollow">ing and reportin" rel="nofollow">ing factual in" rel="nofollow">information rather than communicatin" rel="nofollow">ing complex ideas. Generally, the work is appropriately structured although key poin" rel="nofollow">ints may not be logically sequenced. Some limited analysis and enquiry relevant to the task/disciplin" rel="nofollow">ine in" rel="nofollow">included and has in" rel="nofollow">intermittent success in" rel="nofollow">in presentin" rel="nofollow">ing and commentin" rel="nofollow">ing on outcomes. A limited ability to critically evaluate and reflect. Although some critical reflection is evident, the balance within" rel="nofollow">in the work is likely to be in" rel="nofollow">in favour of description and factual presentation. Connections are made between economic theory and the experiment, but not always in" rel="nofollow">in a completely appropriate manner. (Lower Second) 50 - 59 A secure understandin" rel="nofollow">ing of the set task and an ability to have met the associated learnin" rel="nofollow">ing outcomes and address the assessment criteria at a satisfactory level. Displays a sound knowledge and understandin" rel="nofollow">ing of most key aspects of the field of study relevant to the task and there is some evidence of an ability to apply such knowledge. Some evidence of in" rel="nofollow">independent thin" rel="nofollow">inkin" rel="nofollow">ing beyond programme notes. Overall, the structure and format of the work are appropriate. Occasional faults in" rel="nofollow">in the presentation of work, but overall, these do not detract from the clarity of expression. Examples of research/scholarship referred to in" rel="nofollow">in the work demonstrate in" rel="nofollow">individual readin" rel="nofollow">ing and in" rel="nofollow">investigative ability to critically evaluate and reflect although there may be some over- reliance on description and factual presentation. Arguments are usually substantiated. The experiments results are mostly correctly related to basic economic theory. (Upper Second) 60-69 Demonstrates a full understandin" rel="nofollow">ing of the set task and an ability to have met the learnin" rel="nofollow">ing outcomes and address the assessment criteria at a good level. A detailed knowledge and thorough understandin" rel="nofollow">ing of key aspects of the field of study relevant to the task are shown. There is clear evidence of an ability to apply such knowledge and, in" rel="nofollow">in some contexts, to extend and transform it. Discussion of complex concepts is often tackled successfully and there is evidence of in" rel="nofollow">independent thin" rel="nofollow">inkin" rel="nofollow">ing. Displays an ability to communicate in" rel="nofollow">information, ideas and concepts clearly and succin" rel="nofollow">inctly. Work is well presented and the format appropriate. Key poin" rel="nofollow">ints are appropriately organised and the writin" rel="nofollow">ing style is fluent and arguments are well articulated. Detailed analysis and critical enquiry relevant to the task/disciplin" rel="nofollow">ine is undertaken by makin" rel="nofollow">ing use of appropriate techniques and has considerable success in" rel="nofollow">in presentin" rel="nofollow">ing and commentin" rel="nofollow">ing on outcomes. There is lin" rel="nofollow">inkage between theory and practice. Examples referred to in" rel="nofollow">indicate a breadth and depth of in" rel="nofollow">individual readin" rel="nofollow">ing and in" rel="nofollow">investigation that extend beyond the sources provided. The referencin" rel="nofollow">ing of literature and other sources is almost always accurate. Arguments are clearly considered and substantiated and there is evidence of an ability to make appropriate judgements and to suggest solutions to problems. Good connections between economic theory and the results of the experiment, with most relevant theory covered. Some evidence of other real life examples used provide backup the experiment data. (First) 70 – 79 Demonstrates a full and detailed understandin" rel="nofollow">ing of the set task and an ability to have met the learnin" rel="nofollow">ing outcomes and address the assessment criteria at a very good level. A detailed knowledge and systematic understandin" rel="nofollow">ing of key aspects of the field of study relevant to the task are evident. There is strong evidence of an ability to extend, transform and apply such knowledge. The student also demonstrates an ability to engage in" rel="nofollow">in confident discussion of complex concepts and to recognise the limitations and ambiguity of disciplin" rel="nofollow">inary knowledge. Independent thin" rel="nofollow">inkin" rel="nofollow">ing and origin" rel="nofollow">inal in" rel="nofollow">insights are also present in" rel="nofollow">in the report. Ability shown in" rel="nofollow">in communicatin" rel="nofollow">ing in" rel="nofollow">information, complex ideas and concepts in" rel="nofollow">in a coherent and succin" rel="nofollow">inct manner. The standard of presentation is high and the format appropriate. Key poin" rel="nofollow">ints are logically organised and in" rel="nofollow">in written work, the style is lucid and mature. Detailed and thorough knowledge of current research/advanced scholarship in" rel="nofollow">in the disciplin" rel="nofollow">ine. The use of scholarly reviews/primary sources is confident and a breadth and depth of in" rel="nofollow">individual readin" rel="nofollow">ing and in" rel="nofollow">investigation, extendin" rel="nofollow">ing beyond the sources provided, is apparent. The referencin" rel="nofollow">ing of literature and other sources is accurate and in" rel="nofollow">in lin" rel="nofollow">ine with academic conventions. An ability to engage in" rel="nofollow">in critical evaluation of concepts/arguments/data and to make appropriate and in" rel="nofollow">informed judgements is shown. Arguments are well developed, sustain" rel="nofollow">ined and substantiated. Where relevant, assumptions are challenged and there is clear recognition of the complexities of academic debate. Appropriate and sometimes in" rel="nofollow">innovative solutions are offered to problems. 80 - 89 Beyond the above, a full and detailed understandin" rel="nofollow">ing of the set task and an ability to have met the learnin" rel="nofollow">ing outcomes and address the assessment criteria at an excellent level is displayed. 90 - 100 Beyond the above, demonstrates a full and detailed understandin" rel="nofollow">ing of the set task and an ability to have met the learnin" rel="nofollow">ing outcomes and address the assessment criteria at an outstandin" rel="nofollow">ing and exceptional level. Work is of a standard deemed to be worthy of publication Reference citations extend significantly beyond the main" rel="nofollow">in body of readin" rel="nofollow">ing normally expected in" rel="nofollow">in the disciplin" rel="nofollow">ine/field of study.