- Monopoly competition
- sequential
- monopolist seller can anticipate choices of buyers
- buyers buy if the price is lower than value
- each buyer plays own game with seller
- seller pays many games with all buyers
- indifference … I can chose anything
- cartel = monopoly
- competition price (4$ 30cents)
- monopoly pric (54$ 80cents)
- buyers could form a cartel
- 1 buyer would still not be profitable, all others would be
- not subgame perfect
- empty threat, since buyers are not likely to go through with their cartel plan
- welfare without monopoly always higher
- monopolist takes largest share, then the buyers
- welfare loss due to monopolies
