64-584: The Painshawfield, Batt House and Birches Nook Estate is a housing estate in the village of Stocksfield in Northumberland , England. It is commonly known as the Painshawfield Estate , being named after one of the three farms on whose land the Estate was built in the years following 1895. Painshawfield is in the parliamentary constituency of Hexham . This Northumberland location article
128-564: A panel building constructed of pre-fabricated, pre-stressed concrete , such as those extant in the Czech Republic, Slovakia and elsewhere in the world. Large housing estates of concrete panel buildings (paneláks) now dominate the streets of Prague , Bratislava and other towns. The largest housing estate in Central Europe and Slovakia can be found in Petržalka (population about 130,000),
192-561: A closed oligopoly is where there are prominent barriers to market entry which preclude other firms from easily entering the market. Entry barriers include high investment requirements, strong consumer loyalty for existing brands, regulatory hurdles and economies of scale . These barriers allow existing firms in the oligopoly market to maintain a certain price on commodities and services in order to maximise profits. Collusion among firms in an oligopoly market structure occurs where there are express or tacit agreements between firms to follow
256-789: A cluster of high-rise buildings, often with its own shopping centre or market in the case of larger developments. Mei Foo Sun Chuen , built by Mobil , is the earliest (1965) and largest (99 blocks) example of its kind. Since the mid-1990s, private developers have been incorporating leisure facilities including clubhouse facilities, namely swimming pools, tennis courts and function rooms in their more up-market developments. The most recent examples would also have cinemas, dance studios, cigar-rooms. Uniform high-rise developments may form 'wall effect ( Chinese : 屏風效應 )', adversely affecting air circulation, causing some controversy. In-fill developments will tend to be done by smaller developers with less capital. These will be smaller in scale, and less prone to
320-480: A hypothesised convex bend with a discontinuity at the bend–"kink". Thus, the first derivative at that point is undefined and leads to a jump discontinuity in the marginal revenue curve . Because of this jump discontinuity in the marginal revenue curve, marginal cost could change without necessarily changing the price or quantity. The motivation behind the kink is that in an oligopolistic or monopolistic competitive market, firms will not raise their prices because even
384-601: A joint profit-maximizing oligopoly industry can model the behaviors of oligopolists' pricing decisions other than that of the price leader. According to the kinked-demand model, each firm faces a demand curve kinked at the existing price. The assumptions of the model are: If the assumptions hold, then: The gap in the marginal revenue curve means that marginal costs can fluctuate without changing equilibrium price and quantity Thus, prices tend to be rigid. Market power and market concentration can be estimated or quantified using several different tools and measurements, including
448-514: A means of producing public housing leading to monotenure estates full of council houses often known as "council estates". The latter can refer to higher end tract housing for the middle class and even upper middle class . The problems incurred by the early attempts at high density tower-block housing turned people away from this style of living. The resulting demand for land has seen many towns and cities increase in size for relatively moderate increases in population. This has been largely at
512-519: A monopolist while avoiding breaches of market regulations. Competition authorities have taken various measures to effectively discover and prosecute oligopolistic and anticompetitive behaviour. The leniency program and screening are currently two popular mechanisms. Leniency programs encourage antitrust firms to be more proactive participants in confessing collusive behaviours by granting them immunity from fines, among other penal reductions. Leniency programs have been implemented by countries including
576-561: A part of the Slovak capital of Bratislava. In Britain and Ireland , housing estates have become prevalent since the Second World War , as a more affluent population demanded larger and more widely spaced houses coupled with the increase of car usage for which terraced streets were unsuitable. Housing estates were produced by either local authorities (more recently, housing associations ) or by private developers. The former tended to be
640-450: A particular price structure in relation to particular products (for homogenous products) or particular transaction or product classes (for heterogeneous products). Colluding firms are able to maximise profits at a level above the normal market equilibrium . Interdependence in oligopolies is reduced when firms collude, because there is a lessened need for firms to anticipate the actions of other firms in relation to prices. Collusion closes
704-440: A point is reached where neither firm desires to act any differently, given their predictions of the other firm's responsive behaviour. The equilibrium is the intersection of the two firm's reaction functions , which show how one firm reacts to the quantity choice of the other firm. The reaction function can be derived by calculating the first-order condition (FOC) of the firms' optimal profits. The FOC can be calculated by setting
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#1732869779687768-414: A price higher than marginal costs, highly rational firms would still not be able to stay at a price higher than marginal cost. Whilst Bertrand price competition is a useful abstraction of markets in many settings, due to its lack of ability to capture human behavioural patterns, the approach has been criticised for being inaccurate in predicting prices. The model assumptions are: The only Nash equilibrium
832-442: A small price increase will lose many customers. However, even a large price decrease will gain only a few customers because such an action will begin a price war with other firms. The curve is, therefore, more price-elastic for price increases and less so for price decreases. This model predicts that more firms will enter the industry in the long run, since market price for oligopolists is more stable. The kinked demand curve for
896-431: A tight oligopoly, only a few firms dominate the market, and there is limited competition. A loose oligopoly, on the other hand, has many interdependent firms which often collude to maximise profits. Markets can be classified into tight and loose oligopolies using the four-firm concentration ratio, which measures the percentage market share of the top four firms in the industry. The higher the four-firm concentration ratio is,
960-422: A total revenue function of R T = Q 1 P = Q 1 ( M − Q 2 − Q 1 ) = M Q 1 − Q 1 Q 2 − Q 1 2 {\displaystyle R_{T}=Q_{1}P=Q_{1}(M-Q_{2}-Q_{1})=MQ_{1}-Q_{1}Q_{2}-Q_{1}^{2}} . The marginal revenue function
1024-462: A tract of land by one builder and controlled by one management." In the United Kingdom , the term is quite broad and can include anything from high-rise government-subsidised housing right through to more upmarket, developer-led suburban tract housing . Such estates are usually designed to minimise through-traffic flows and provide recreational space in the form of parks and greens. The use of
1088-562: Is P A = P B = MC {\displaystyle P_{A}=P_{B}={\text{MC}}} . In this situation, if a firm raises prices, it will lose all its customers. If a firm lowers price, P < MC {\displaystyle P<{\text{MC}}} , then it will lose money on every unit sold. The Bertrand equilibrium is the same as the competitive result. Each firm produces where P = MC {\displaystyle P={\text{MC}}} , resulting in zero profits. A generalization of
1152-526: Is R M = ∂ R T ∂ Q 1 = M − Q 2 − 2 Q 1 {\displaystyle R_{M}={\frac {\partial R_{T}}{\partial Q_{1}}}=M-Q_{2}-2Q_{1}} . Equation 1.1 is the reaction function for firm 1 {\displaystyle 1} . Equation 1.2 is the reaction function for firm 2 {\displaystyle 2} . The Nash equilibrium can thus be obtained by solving
1216-965: Is a stub . You can help Misplaced Pages by expanding it . Housing estate A housing estate (or sometimes housing complex , housing development , subdivision or community ) is a group of homes and other buildings built together as a single development. The exact form may vary from country to country. Popular throughout the United States and the United Kingdom , they often consist of single family detached , semi-detached ("duplex") or terraced homes, with separate ownership of each dwelling unit . Building density depends on local planning norms. In major Asian cities, such as Hong Kong , Kuala Lumpur , Shanghai , Shenzhen , Singapore , Seoul , Taipei , and Tokyo , an estate may range from detached houses to high-density tower blocks with or without commercial facilities; in Europe and America, these may take
1280-506: Is a situation similar to perfect competition , where oligopolists have their own market structure . In this situation, each company in the oligopoly has a large share in the industry and plays a pivotal, unique role. Many jurisdictions deem collusion to be illegal as it violates competition laws and is regarded as anti-competition behaviour. The EU competition law in Europe prohibits anti-competitive practices such as price-fixing and competitors manipulating market supply and trade. In
1344-492: Is infrequent. Greater market transparency, for instance, would decrease collusion, as oligopolistic companies expect retaliation sooner where changes in their prices and quantity of sales are clear to their rivals. Large capital investments required for entry, including intellectual property laws, certain network effects, absolute cost advantages, reputation, advertisement dominance, product differentiation, brand reliance, and others, all contribute to keeping existing firms in
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#17328697796871408-417: Is the amount produced by firm 1 {\displaystyle 1} , and M = 60 {\displaystyle M=60} is the market. Assume that marginal cost is C M = 12 {\displaystyle C_{M}=12} . By following the profit maximisation rule of equating marginal revenue to marginal costs, firm 1 {\displaystyle 1} can obtain
1472-585: The Lerner index , stochastic frontier analysis , New Empirical Industrial Organization (NEIO) modeling, as well as the Herfindahl-Hirschman index . As a quantitative description of oligopoly, the four-firm concentration ratio is often utilised and is the most preferable ratio for analyzing market concentration . This measure expresses, as a percentage, the market share of the four largest firms in any particular industry. For example, as of fourth quarter 2008,
1536-412: The communist era because the construction of large housing estates was an important part of building plans in communist countries in Europe. They can be located in suburban and urban areas . Accordingly, a housing estate is usually built by a single contractor, with only a few styles of house or building design, so they tend to be uniform in appearance. A housing development is "often erected on
1600-433: The supply function . Firms in an oligopoly are also mutually interdependent, as any action by one firm is expected to affect other firms in the market and evoke a reaction or consequential action. As a result, firms in oligopolistic markets often resort to collusion as means of maximising profits . Nonetheless, in the presence of fierce competition among market participants, oligopolies may develop without collusion. This
1664-517: The Bertrand model is the Bertrand–Edgeworth model , which allows for capacity constraints and a more general cost function. The Cournot model and Bertrand model are the most well-known models in oligopoly theory, and have been studied and reviewed by numerous economists. The Cournot-Bertrand model is a hybrid of these two models and was first developed by Bylka and Komar in 1976. This model allows
1728-496: The Cournot model and Bertrand model, it is assumed that all the firms are competing with the same choice variable, either output or price. However, some economists have argued that this does not always apply in real world contexts. Economists Kreps and Scheinkman's research demonstrates that varying economic environments are required in order for firms to compete in the same industry while using different strategic variables. An example of
1792-406: The Cournot model is more suitable for firms in industries that face capacity constraints, where firms set their quantity of production first, then set their prices. The Bertrand model is more applicable for industries with low capacity constraints, such as banking and insurance. The Cournot – Nash model is the simplest oligopoly model. The model assumes that there are two equally positioned firms;
1856-502: The Cournot-Bertrand model in real life can be seen in the market of alcoholic beverages. The production times of alcoholic beverages differ greatly creating different economic environments within the market. The fermentation of distilled spirits takes a significant amount of time; therefore, output is set by producers, leaving the market conditions to determine price. Whereas, the production of brandy requires minimal time to age, thus
1920-496: The US, Japan and Canada. Nonetheless, leniency programs may be abused, their efficacy has been questioned, and they ultimately allow some colluding firms to experience less harsh penalties. It is currently unknown what the overall effect of leniency programs is. Screening There are two screening methods that are currently available for competition authorities: structural screening and behavioural screening. Structural screening refers to
1984-955: The US, the United States Department of Justice Antitrust Division and the Federal Trade Commission are tasked with stopping collusion . In Australia, the Federal Competition and Consumer Act 2010 has details the prohibition and regulation of anti-competitive agreements and practices. Although aggressive, these laws typically only apply when firms engage in formal collusion, such as cartels . Corporations may often thus evade legal consequences through tacit collusion , as collusion can only be proven through direct communication between companies. Within post-socialist economies, oligopolies may be particularly pronounced. For example in Armenia , where business elites enjoy oligopoly, 19% of
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2048-504: The United States include tract housing , apartment complexes , and public housing . Oligopoly An oligopoly (from Ancient Greek ὀλίγος ( olígos ) 'few' and πωλέω ( pōléō ) 'to sell') is a market in which pricing control lies in the hands of a few sellers. As a result of their significant market power, firms in oligopolistic markets can influence prices through manipulating
2112-545: The better-known models are the dominant firm model , the Cournot–Nash model , the Bertrand model and the kinked demand model. As different industries have different characteristics, oligopoly models differ in their applicability within each industry. With few sellers, each oligopolist is likely to be aware of the actions of their competition. According to game theory , the decisions of one firm influence, and are influenced by,
2176-570: The combined total market share of Verizon Wireless, AT&T, Sprint, and T-Mobile comprises 97% of the U.S. cellular telephone market. Oligopolies are assumed to be aware of competition laws as well as the repercussions that they could face if caught engaging in anti-competition behaviour. In lieu of explicit communication, firms may be observed as engaging in tacit collusion , which occurs through competitors collectively and implicitly understanding that by jointly raising prices, each competitor can achieve economic profits comparable to those achieved by
2240-402: The decisions of other firms. Strategic planning by oligopolists needs to take into account the likely responses of the other market participants. The following game-theoretical oligopoly models attempt to describe and predict the behaviour of oligopolies: One major difference between varying industries is capacity constraints. Both Cournot model and Bertrand model consist of the two-stage game;
2304-440: The different housing types will have their distinctive characteristics, density ranges, number of units, and floors. Due to dense population and government control of land use, Hong Kong 's most common residential housing form is the highrise housing estate, which may be publicly owned, privately owned, or semi-private. Due to the real-estate developers oligopoly (sometimes called real estate hegemony, Chinese : 地產霸權 ) in
2368-495: The equations simultaneously or graphically. Reaction functions are not necessarily symmetric. Firms may face differing cost functions, in which case the reaction functions and equilibrium quantities would not be identical. The Bertrand model is essentially the Cournot–Nash model, except the strategic variable is price rather than quantity. Bertrand's model assumes that firms are selling homogeneous products and therefore have
2432-412: The estates. They may vary in scale, and are usually located in the remote or less accessible parts of the territory, but urban expansion has put some of them in the heart of the urban area. Although some units are destined exclusively for rental, some of the flats within each development are earmarked for sale at prices that are lower than for private developments. Private housing estates usually feature
2496-471: The expense of rural and greenfield land . Recently, there has been some effort to address this problem by banning the development of out-of-town commercial developments and encouraging the reuse of brownfield or previously developed sites for residential building. Nevertheless, the demand for housing continues to rise, and in the UK at least has precipitated a significant housing crisis. Forms of housing estates in
2560-702: The firm, increases. Firms in an oligopoly who benefit from economies of scale have a distinct advantage over firms who do not. Their marginal costs are lower, such that the firm's equilibrium at M R = M C {\displaystyle MR=MC} would be higher. Economies of scale are seen prevalently when two firms in oligopolistic market agree to a merger , as it allows the firm to not only diversify their market but also increase in size and output production, with negligible relative increases in output costs. These sorts of mergers are typically seen when companies expand into large business groups by appreciating and increasing capital to buy smaller companies in
2624-449: The firms compete on the basis of quantity rather than price, and each firm makes decisions on the assumption that the other firm's behaviour is unchanging. The market demand curve is assumed to be linear, and marginal costs constant. In this model, the Nash equilibrium can be found by determining how each firm reacts to a change in the output of the other firm, and repeating this analysis until
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2688-470: The first derivative of the objective function to zero. For example, assume that the firm 1 {\displaystyle 1} 's demand function is P = ( M − Q 2 ) − Q 1 {\displaystyle P=(M-Q_{2})-Q_{1}} , where Q 2 {\displaystyle Q_{2}} is the quantity produced by the other firm , Q 1 {\displaystyle Q_{1}}
2752-490: The form of town housing, high-rise housing projects, or the older-style rows of terraced houses associated with the Industrial Revolution , detached or semi-detached houses with small plots of land around them forming gardens, and are frequently without commercial facilities and such. In Central and Eastern Europe , living in housing estates is a common way of living. Most of these housing estates originated during
2816-404: The gap in the asymmetry of information typically present in a market of competing firms. One form of collusive oligopoly is a cartel , a monopolistic organisation and relationship formed by manufacturers who produce or sell a certain kind of goods in order to monopolise the market and obtain high profits by reaching an agreement on commodity price, output and market share allocation. However,
2880-531: The identification of industry traits or characteristics, such as homogeneous goods, stable demand, less existing participants, which are prone to cartel formation. Behavioural screening is typically implemented when a cartel formation or agreement has already been reached, with authorities subsequently looking into firms' data to determine if price variance is low or experiences significant price changes. Particular companies may employ restrictive trade practices in order to inflate prices and restrict production in much
2944-529: The late 1990s. For example, EU competition law has prohibited some unreasonable anti-competitive practices , such as directly or indirectly fixing selling prices, manipulating market supplies and controlling trade among competitors. In the US, the Antitrust Division of the Justice Department and Federal Trade Commission was created to fight collusion among cartels . Tacit collusion is becoming
3008-423: The less competitive the market is. When the four-firm concentration ration is higher than 60, the market can be classified as a tight oligopoly. A loose oligopoly occurs when the four-firm concentration is in the range of 40-60. Some characteristics of oligopolies include: Economies of scale occur where a firm's average costs per unit of output decreases while the scale of the firm, or the output being produced by
3072-431: The market and precluding new firms from entering. There is no single model that describes the operation of an oligopolistic market. The variety and complexity of the models exist because numerous firms can compete on the basis of price, quantity, technological innovations, marketing, and reputation. However, there are a series of simplified models that attempt to describe market behavior under certain circumstances. Some of
3136-449: The market to be split into two groups of firms. The first group's aim is to optimally adjust their output to maximise profits, while the second group's aim is to optimally adjust their prices. This model is not accepted by some economists who believe that firms in the same industry cannot compete with different strategic variables. Nonetheless, this model has been applied and observed in both real-world examples and theoretical contexts. In
3200-420: The nature of the goods firms produce or trade in. A perfect (sometimes called a 'pure') oligopoly is where the commodities produced by the firms are homogenous (i.e., identical or materially the same in nature) and the elasticity of substitute commodities is near infinite . Generally, where there are two homogenous products, a rational consumer's preference between the products will be indifferent, assuming
3264-417: The other hand, involve firms producing commodities which are heterogenous. Where companies in an industry need to offer a diverse range of products and services, such as in the manufacturing and service industries, such industries are subject to imperfect oligopoly. An open oligopoly market structure occurs where barriers to entry do not exist, and firms can freely enter the oligopolistic market. In contrast,
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#17328697796873328-438: The price is set by the producers and the supply is determined by the quantity demanded at that price. In an oligopoly, firms operate under imperfect competition . The fierce price competitiveness, created by a sticky-upward demand curve , causes firms to use non-price competition in order to accrue greater revenue and market share. "Kinked" demand curves appear similar to traditional demand curves but are distinguished by
3392-424: The products share common prices. Similarly, sellers will be relatively indifferent between purchase commitments in relation to homogenous products. In an oligopolistic market of a primary industry , such as agriculture or mining, commodities produced by oligopolistic enterprises will have strong homogeneity; as such, such markets are described as perfect oligopolies. Imperfect (or 'differentiated') oligopolies, on
3456-677: The prosperous face of Pakistan. Gated communities in Pakistan are targeted towards upper middle class and upper class, and are mostly immune from problems of law enforcement. Forms of housing estates may vary in the Czech Republic and Slovakia . During the communist era of Czechoslovakia , a construction of large housing estates ( Czech : sídliště , Slovak : sídlisko ) was an important part of building plans. The government wanted to provide large quantities of fast and affordable housing and to slash costs by employing uniform designs over
3520-487: The risk of loss created by new competition. In other words, firms will lose less for deviation and thus have more incentive to undercut collusion prices when more join the market. The rate at which firms interact with one another will also affect the incentives for undercutting other firms; short-term rewards for undercutting competitors are short lived where interaction is frequent, as a degree of punishment can expected swiftly by other firms, but longer-lived where interaction
3584-506: The same marginal production costs, and firms will focus on competing in prices simultaneously. After competing in prices for a while, firms would eventually reach an equilibrium where prices would be the same as marginal costs of production. The mechanism behind this model is that even by undercutting just a small increment of its price, a firm would be able to capture the entire market share. Even though empirical studies suggest that firms can easily make much higher profits by agreeing on charging
3648-452: The same markets, which consequently increases the profit margins of the business. In a market with low entry barriers, price collusion between established sellers makes new sellers vulnerable to undercutting. Recognising this vulnerability, established sellers will reach a tacit understanding to raise entry barriers to prevent new companies from entering the market. Even if this requires cutting prices, all companies benefit because they reduce
3712-495: The same way that a monopoly does. Whenever there is a formal agreement for such collusion between companies that usually compete with one another, the practice is known as a cartel . An example of an economic cartel is OPEC , where oligopolistic countries control the worldwide oil supply, leaving a profound influence on the international price of oil. There are legal restrictions on cartels in most countries, with regulations and enforcement against cartels having been enacted since
3776-547: The stability and effectiveness of a cartel are limited, and members tend to break from the alliance in order to gain short-term benefits. A full oligopoly is one in which a price leader is not present in the market, and where firms enjoy relatively similar market control. A partial oligopoly is one where a single firm dominates an industry through saturation of the market, producing a high percentage of total output and having large influence over market conditions. Partial oligopolies are able to price-make rather than price-take. In
3840-496: The term may have arisen from an area of housing being built on what had been a country estate as towns and cities expanded in and after the 19th century. It was in use by 1901. Reduction of the phrase to mere "estate" is common in the United Kingdom and Ireland (especially when preceded by the specific estate name), but not in the United States. There are several different housing types utilized by housing developers. Each of
3904-416: The territory, and the economies of scale of mass developments, there is the tendency of new private tower block developments with 10 to over 100 towers, ranging from 30 to 70 stories high. Public housing provides affordable homes for those on low incomes, with rents which are heavily subsidised , financed by financial activities such as rents and charges collected from car parks and shops within or near
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#17328697796873968-676: The wall effect. Given the security situation and power shortages in South Asia, 'gated communities' with self-generated energy and modern amenities (24-hour armed security, schools, hospitals, a fire department, retail shopping, restaurants and entertainment centres ) such as Bahria Town and DHA have been developed in all major Pakistani cities. Bahria Town is the largest private housing society in Asia . Bahria has been featured by international magazines and news agencies such as GlobalPost , Newsweek , Los Angeles Times and Emirates 24/7 , referred to as
4032-504: The whole country. They also sought to foster a "collectivist nature" in people. People living in these housing estates can either usually own their apartments or rent them, usually through a private landlord. There's usually a mix of social classes in these housing estates. Most buildings in Czech and Slovak housing estates are so called " paneláks ", a colloquial term in Czech and Slovak for
4096-444: The whole economy is monopolized, making it the most monopolized country in the region . Many industries have been cited as oligopolistic, including civil aviation , electricity providers, the telecommunications sector, rail freight markets, food processing , funeral services , sugar refining , beer making , pulp and paper making , and automobile manufacturing . Perfect and imperfect oligopolies are often distinguished by
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