Chapter 13 - Competitive Dynamics

A ‘Blue Ocean’ strategy aims to attack competitors directly.
1. True
2. False
An oligopoly is a market that is dominated by a single supplier that is able to determine the price, whereas other suppliers are small ‘price takers’ that are not able to influence the market price.
1. True
2. False
Scenario analysis is a technique of looking into the future that is particularly useful in highly volatile environments.
1. True
2. False
Tacit collusion involves competitors directly communicating with each other how to influence the nature of competition in ways that benefit both of them.
1. True
2. False
Prisonner’s dilemma is a concept from game theory that helps explaining while cartels often break down.
1. True
2. False
Leniency programmes by competition authorities create incentive to report illegal collusion that a company has become involved in.
1. True
2. False
Sun Tze’s quote “if you know the enemy and know yourself, your victory with stand in now doubt” points to the importance of:
1. Competitor analysis and resource analysis
2. Analysis of institutions and resources
3. Analysis of political parties against and for capitalism
4. Analysis of suppliers and customers
Competitors are likely to strongly launch a counter attack if
1. they are aware of the original attack
2. they are motivated to counterattack
3. they have the capabilities to launch a successful counterattack
4. all the three conditions mentioned above are present at the same time
5. none of the conditions is present
Adam Smith’s said “People of the same trade seldom meet together, even for merriment and diversion, … but their conversation often ends in a conspiracy against the public”. What sort of behaviour was he referring to:
1. Competitive dynamics
2. Tax dodging
3. Collusion
4. Prisoners’ dilemmas
The game theoretical setting of a prisoners’ dilemma is effective in inducing players to cheat if the following condition is met:
1. It is a ‘repeated game’
2. The players are allowed to communicate
3. There is a third party enforcing the rules
4. All of the above conditions
5. None of the above conditions
Collusion between firms is less likely if.
1. There are many firms in the market
2. There is an industry price leader
3. Products are more heterogeneous
4. Barriers to entry are low
Which of the following practices is not penalized by the European Union as a competition authority:
1. Fixing prices
2. Entering another EU country without agreement of national authorities
3. Anti-competitive practices by a dominant player in a market
4. Agreements between two companies not to compete in each other’s home market

Chapter 13 - Competitive Dynamics

Quiz