Oligopolies in action
Recommend on Google+
Don’t you just love it when oligopolistic theory plays out in the real world:
On Wednesday, EdF announced it was cutting gas prices by 5%.
Thus began the price war with the strategic interdependence that exists in oligopolistic markets…
British Gas also responded with a 5% cut (although craftily undercut EdF by saying it will be immediate, rather than EdF’s one which will take effect in February).
SSE responded with its own price cut on Thursday…
NPower announced their cut today on Friday…
E.On and Scottish Power are set to follow soon.
Is this price war driven by a follower-leader relationship, or is it simply due to them facing the same cost structures?
Read about it here.
blog comments powered by Disqus
ECONOMICS TEACHER RESOURCE NEWSLETTER
Join over 6,000 other Economics Teachers in the UK and around the world who receive the tutor2u regular Economics Resource Email Newsletter. Get special offers, first news of latest resources, teaching ideas, conferences and workshops + loads of great ideas for teaching economics from our blog authors.
