Oligopoly and monopoly: essence, characteristics, advantages and disadvantages. Types of monopolies: natural, artificial, open, closed

The term "oligopoly" comes from the Greek words oligos (several) and poleo (sell).

Principled no consequence large quantity firms on the market are their special relationship, manifested in close interdependence and intense rivalry between. In contrast to or pure monopoly, in an oligopoly, the activities of any of the firms cause a mandatory response from competitors. Such interdependence of the actions and behavior of a few firms is key characteristic of oligopoly and applies to all areas of competition: price, sales volume, market share, investment and innovation activities, sales promotion strategy, after-sales services, etc.

We have already mentioned volumetric, or quantitative, coefficient cross elasticity demand, which serves to quantify the interdependence of firms in the market. This coefficient shows the degree of quantitative change in the price of firm X when the firm's output changes Y on 1% .

If the volume cross elasticity of demand is equal to or close to zero (as is the case under perfect competition and under pure monopoly), then an individual producer can ignore the reaction of competitors to his actions. Conversely, the higher the elasticity coefficient, the greater the interdependence between firms in the market. In oligopoly Eq>0, however, its exact value depends on the specifics of the industry in question and specific market conditions.

Product homogeneity or differentiation

The type of product produced by an oligopoly can be either homogeneous or diversified.

• If consumers have no particular preference for any particular brand, if all products in the industry are perfect substitutes, then the industry is called a pure or homogeneous oligopoly. The most typical examples of practically homogeneous products are cement, steel, aluminum, copper, lead, newsprint, and viscose.
• If the goods have a trademark and are not perfect substitutes (and the difference between the goods can be either real (in terms of technical characteristics, design, workmanship, services provided) or imaginary (brand name, packaging, advertising), then the products are considered differentiated, and the industry is called a differentiated oligopoly.Examples include the markets for cars, computers, televisions, cigarettes, toothpaste, soft drinks, beer.

Degree of influence on market prices

The extent to which a firm influences market prices, or its monopoly power, is high, although not to the same extent as a pure monopoly.

Market power is determined the relative excess of a firm's market price over its marginal cost(with perfect competition P=MS), or

L=(P-MC)/P.

Quantitative value given coefficient(Lerner coefficient) for an oligopolistic market is greater than for a perfect and monopolistic competition, but less than with a pure monopoly, i.e. fluctuates within 0

Barriers

Entry into the market for new firms is difficult, but possible.

When considering this characteristic, it is necessary to distinguish between already established, slow growing markets and young, dynamically developing markets.

• For slow growing oligopolistic markets characteristic very high barriers. As a rule, these are industries with sophisticated technology, large equipment, tall sizes minimally efficient production, significant costs for sales promotion. These industries are characterized by a positive , due to which the minimum (min ATS) is achieved only with a very large volume of output. In addition, entry into a market dominated by well-known brands inevitably leads to high initial investment costs. Only large competitive firms with the necessary financial and organizational resources can afford to enter such markets.
• For young emerging oligopolistic markets the emergence of new firms is possible, since demand is expanding quite quickly, and an increase in supply does not have a downward effect on prices.

The advantages of using this indicator are that it avoids the problem of assessing profitability and marginal cost for the industry.
Numerous studies have established that the coefficient q is, on average, quite stable over time, and firms with a high value usually have unique factors of production or produce unique goods, i.e., these firms are characterized by the presence of monopoly rent. Firms with small values ​​of q operate in competitive or regulated industries.
Index monopoly power Papandreou is based on the concept of cross elasticity of residual demand, i.e., demand for a given firm's product. A necessary condition for the exercise of monopoly power is the weak influence of the prices of other firms in the same market on the volume of sales of a given firm.
A. Papandreou in 1949 proposed the so-called penetration coefficient, showing by how many percent the company’s sales volume will change when the competitor’s price changes by one percent:

Where Qdi is the volume of demand for a product of a firm with monopoly power; Pj is the price of the competitor (competitors); lj is the coefficient of limited capacity of competitors, measured as the ratio of the potential increase in output to the increase in the volume of demand for their product caused by a decrease in price.
The concentration of sellers in a market is extremely important in determining market structure. However, the concentration of sellers in itself does not determine the level of monopoly power - the ability to influence the price.
Only with sufficiently high barriers to entry into the industry can the concentration of sellers be realized in monopoly power - the ability to set a price that ensures a sufficiently high economic profit.

24. Monopolistic competition. Costs of monopolistic competition. Not price competition, advertising.
Monopolistic competition- This market structure, approaching in its characteristics a competitive market, but containing elements of a monopoly. She's different a large number sellers and buyers, minor barriers to entry and exit, heterogeneity of the product produced and the presence of a large number of imperfect substitute products. Demand for the products of firms is quite elastic, but still decreases, market power is small.
Monopolistic competition resembles perfect competition in that due to low barriers to entry and fluctuations in demand
long-run equilibrium industry is achieved at zero economic profit (LRAC=P).
Monopolistic competition is similar to monopoly in that price exceeds marginal cost (P>MS), A optimal output does not correspond to efficient(minimum LRAC - Fig. 5.4).

TO benefits Monopolistic competition refers to the fact that it stimulates the production of a very wide range of diverse consumer goods and services.
Non-price competition - a method of competition that is not based on price rivalry with competitors; in this case, rivalry is conducted on the basis of technical superiority, High Quality and product reliability, more effective methods sales, expansion of the types of services provided and guarantees to customers, payment terms and other methods. It is taken into account that the impact of scientific achievements on the nature and quality of manufactured products has now increased, and the public role and significance trade advertising .
Product differentiation (heterogeneity) manifests itself in the different quality of goods and methods of their pre-sale and after sales service, V different conditions sales, in advertising, trademarks and signs, etc.

25. Oligopoly: character traits, advantages, disadvantages. Cournot model. Analysis of the oligopolistic market in game theory.
Oligopoly is a market structure in which there are several sellers, each of whose share of total sales in the market is so large that a change in the quantity offered by each seller leads to a change in price. In an oligopoly, each firm knows that at least some of its competitors' decisions depend on it. own behavior, and therefore, when making this or that decision, she is obliged to take this circumstance into account.
There are several types of oligopoly:
- "uncoordinated" oligopoly, which excludes contacts between firms to establish common prices and production quotas.
-"cartel"(collusion) oligopolists, represents a conspiracy to establish such an agreed level of prices and sales volumes as to maximize the profits of the entire industry as a whole.
- "playing by the rules" is a compromise between an “uncoordinated” oligopoly and a cartel. These rules can be unspoken, for example, price leadership or an unofficially accepted market price.
Characteristic features of oligopoly. Limited number of market participants and their strong interdependence (by definition). The struggle of firms is concentrated on increasing market share. High probability of “hard” prices (price war) and non-price competition. The wide spread of mergers and acquisitions of firms, as the most effective way capturing a larger market share. The desire for collusion or “playing by the rules.” The presence of significant barriers to entry into the industry, which take different forms: economies of scale of production, cost savings due to accumulated experience, popularity of the product, carried out advertising company, complexity of the product, multiplicity of product models, capital ratio, etc.
Advantages
Favorable price competition among oligopoly participants is possible for the consumer, in which he can gain access to cheaper goods, or higher quality ones, if one of the oligopoly participants relies on the quality of the product and its advertising.
Due to the presence of higher-order competition, the industry can develop more dynamically. Participants in an oligopoly, in an effort to capture a larger market share, reduce prices, improve product quality, increase production volume, seeking profits from scale. All this has a positive effect on the industry as a whole.
Flaws
The possibility of collusion can lead to high prices and low production, and as a result, to a crisis in the industry. The need for antimonopoly regulation.
Cournot theory(Augustin Cournot, French economist, 1838) - the theory of oligopolistic pricing. Considering the interaction of oligopolists, he showed that each firm prefers to produce the quantity of output that maximizes its profit. At the same time, he proceeded from the fact that the volume of goods sold by competitors remains unchanged. Cournot made two main conclusions:
1. For any industry there is a certain and stable equilibrium between sales volume and product price.
2. The equilibrium price depends on the number of sellers. With a single seller, a monopoly price arises. As the number of sellers increases, the equilibrium price falls until it approaches marginal cost.
Thus, the Cournot model shows that the more competitive equilibrium is achieved, the more the number of sellers increases. Many economists have postulated that firms anticipate how their rivals will react to changes in prices or sales volumes. The Cournot model, which allows the opponent to remain inactive (its sales volume is fixed), has been criticized.
Analysis of an oligopolistic market in game theory. It is often noted that oligopoly is really a game of character - a game in which, just as in chess or poker, each player must predict the opponent's actions - his bluff, his counter-actions, his counter-bluff - as best as possible. The founders of game theory, John von Neumann and Oskar Morgenstern, 1944, “Game Theories and Economic Behavior.” Since the nature of pricing and the quantity of goods produced depends on the strategy of the player in the oligopolistic market, economists and mathematicians have developed many challenging games by oligopoly. Games differ in how much each player knows about the actions of the other, how many times the game is repeated, the number of players, and the cost structure. Games were also developed in which participants used a “mixed strategy”, varying their reactions to the actions of competitors on a random basis. These studies have produced many interesting results that apply to individual cases without leading to any general conclusions. Some games are resolved by Nash equilibria, some are not. Some move closer to a competitive model as the number of firms increases, some do not. Some result in an efficient resolution (either from the players' or the market's point of view), some do not. Game theory continues to be active region Oligopoly studies.

26. Typology of cooperative behavior of oligopolists: cartel, conspiracy.
In an oligopoly, firms possessing strategic behavior try to find one form or another of cooperation.
Cartel is an agreement between several enterprises, establishing for all participants the volume of production, prices for goods, and terms of employment work force, exchange of patents, delimitation of sales markets and the share of each participant in the total volume of production and sales. Its goal is to increase prices (above the competitive level), but not to limit the production and supply and marketing activities of participants. At first glance, the similarities between a cartel and a monopoly are obvious. But a cartel, unlike a monopoly, very rarely controls the entire market, because it is forced to take into account the policies of non-cartelized enterprises. In addition, cartel participants have a fairly powerful temptation to deceive their partners by reducing prices or actively advertising their products, which creates conditions for capturing part of the market. As a result, many cartels are temporary market structures and are rare. In addition, the legislation of many countries considers cartel practice illegal and counteracts it with various methods. A classic example of education and existence so far cartel agreement is, for example, the Organization of Petroleum Exporting Countries (OPEC), which different periods In its history, it controlled from 25% to 60% of the oil production of industrial countries. The inability to fully and constantly use the cartel for the interaction of oligopolistic firms forces them to enter into unspoken economic agreements, secret economic policy in the field of price changes and delimitation of spheres of influence. Such cooperation can manifest itself both through the special economic policies of oligopolistic firms in the form of “price rigidity” or “pricing leadership”, and through special organizations such as “patent pools” (or consortia). However, due to the reasons listed above, forms of oligopoly are most often developed in which there is no formal agreement between firms on control over the market.
“Playing by the rules” is a compromise between an “uncoordinated” oligopoly and a cartel. These rules can be unspoken, for example, price leadership or an unofficially accepted single market price.

27. Goals and methods of antimonopoly regulation. Problems of its implementation in the Russian economy.
Antimonopoly regulation- this is purposeful government activity carried out on the basis and within the limits permitted by current legislation, to establish and implement the rules of conduct economic activity in commodity markets with purpose protecting fair competition and ensuring the efficiency of market relations.
Regulatory methods :
-Antitrust laws. Development of laws. The rigidity of control over the implementation of laws by the state.
-Stimulation by the state of the development of effective demand of all categories of consumers: population, industrial demand. This will lead to the development of production, an increase in the number of commodity producers and the development of competition.
-Control of the activities of natural monopolies, control of prices for their goods and services. They cannot behave like commercial entities. The price should be set at a level that maximizes GDP growth (mainly through the development of the real sector of the economy).
-Government measures to implement antimonopoly legislation: expedited consideration in court, liability of judges for violating the deadlines for consideration of antimonopoly cases.
The development of antimonopoly regulation is very important for the development of the Russian economy, where the degree of market monopolization is higher than in states with a historically established market economy. Russian economy inherited from the Soviet economy a high level of concentration of production in many sectors of the economy. In Russia they also have great market power natural monopolies operating in the basic sectors of the economy - electric power and transport. Thus, RAO UES of Russia controls 98% of electricity consumers, RAO GAZPROM controls 94% of the domestic gas market, and the Ministry of Railways controls 77% of freight turnover.

Page 16, total pages: 33

Models of oligopolistic competition

The interdependence of oligopolistic firms in the market determines the specific behavior of oligopolies in the market. Unlike other market structures, an oligopoly enterprise must always take into account that the prices and output volume it chooses directly depend on the market strategy (behavior) of its competitors, which (behavior) in turn is determined by the decision it chooses.

The variety of forms of behavior of oligopolies and the peculiarities of their relationships in specific market situations predetermine the existence of a large number of different models of oligopoly. Only taken as a whole can these models provide a reliable depiction of an oligopolistic competitive market.

It is conventionally accepted to divide oligopolistic markets into two types depending on how its participants interact with each other: cooperative oligopoly and non-cooperative oligopoly.

In a cooperative oligopoly, firms coordinate their mutual behavior by colluding or coordinating their actions in some other way.

In a non-cooperative oligopoly, firms, seeking to maximize profits, act independently, at their own peril and risk. In accordance with this division, oligopoly models are classified.

As an example of non-cooperative oligopoly models, the following will be considered: the Cournot model, the Stackelberg model, and the kinked demand curve model. As an example of a model of a cooperative oligopoly, we will consider a model of price leadership (leadership of a dominant firm in price and barometric price leadership).

1) The Cournot model is a model of equilibrium under conditions of a non-cooperative oligopoly. This model was developed by the French economist and mathematician Augustin Cournot.

The Cournot model assumes that there are only two firms in the market and each firm takes its competitor's price and output unchanged and then makes its decision. Each of the two sellers assumes that its competitor will always keep its output stable.

The Cournot model is shown in Fig. 1.

Figure 1 - Cournot duopoly model

Let us assume that duopolist 1 starts production first and at first turns out to be a monopolist. Its output is q1, which at price P allows it to make maximum profit, because in this case MR=MC=0. At a given output level, the elasticity of market demand is equal to one, and total revenue will reach a maximum. Then duopolist 2 begins production. In his view, the output volume will shift to the right by the amount Oq1 and align with the line Aq1. He perceives segment AD" of the market demand curve DD as the residual demand curve, which corresponds to his marginal revenue curve MR2. The output of duopolist 2 will be equal to half of the demand unsatisfied by duopolist 1, i.e. segment q1D", and the value of its output is equal to q1q2, which will give opportunity to get maximum profit. This output will be a quarter of the total market volume demanded at zero price, OD"(1/2 x 1/2 = 1/4).

At the second step, duopolist 1, assuming that the output of duopolist 2 remains stable, decides to cover half of the remaining unsatisfied demand. Based on the fact that duopolist 2 covers a quarter of market demand, the output of duopolist 1 at the second step will be (1/2)x(1-1/4), i.e. 3/8 of the total market demand, etc. With each subsequent step, the output of duopolist 1 will decrease, while the output of duopolist 2 will increase. Such a process will end with the balancing of their output, and then the duopoly will reach the state

Equilibrium in the Cournot model can be depicted through response curves showing the profit-maximizing levels of output that will be produced by one firm, given the output levels of a competitor.

In Fig. In Figure 2, response curve I represents the profit-maximizing output of the first firm as a function of the output of the second. Response curve II represents the profit-maximizing output of the second firm as a function of the output of the first.

Figure 2 - Response curves

Response curves can be used to show how equilibrium is established. Following the arrows drawn from one curve to the next, starting with output q1 = 12,000, will result in a Cournot equilibrium at point E, at which each firm produces 8,000 units. At point E, two response curves intersect. This is the Cournot equilibrium.

2) Stackelberg model

The Cournot model, for all its merits, has caused a lot of criticism since its appearance. This model was accused of being overly simplified and unrealistic in its initial assumptions, since in the Cournot model: oligopolists do not assume the possibility of changing the output volumes of their competitors; the behavior of firms in the market is exactly the same (symmetrical). Meanwhile, in practice, oligopolists can adhere to different types of behavior.

The model of asymmetric oligopoly was proposed by the German economist G. von Stackelberg. This model develops Cournot's ideas. Just as in the Cournot model, each enterprise chooses the optimal production volume, but Stackelberg puts forward a new hypothesis: a duopolist leader and a duopolist follower can exist in the market.

The follower adheres to the Cournot assumption; he makes decisions about the optimal output volume in accordance with his reaction curve, taking the competitor's output as given and adjusting his production to this volume. The leader, on the contrary, plays a dominant role in the market. He understands that the other firm is behaving as a follower, and knowing that firm's response curve, he makes his output decisions essentially as a monopolist.

A comparison of the Cournot equilibrium and the Stackelberg equilibrium shows that the position of the leader firm is more preferable than in the symmetric situation of the Cournot model, however, if both firms strive to become leaders, this leads to aggressive competition and a price war, which can lead to lower prices to competitive levels and will continue until one of the firms gives up its claims.

3) Broken demand curve model.

The model was developed in 1939 by economist Paul Sweezy. The main task of the author of the model is to explain price rigidity under conditions of a non-cooperative oligopoly.

This model assumes that competitors will support any price reduction by one of the firms, but will ignore its increase. This assumption reflects pricing practices in oligopolistic industries.

Let us assume that there are two firms on the market - A and B, which have approximately equal shares of production of a differentiated product, and there is no agreement between the firms to divide the market (Fig. 3).

There are two possible behavior options for firms:

1) When one firm changes its price, another firm exactly repeats its strategy - then the demand schedule for the first firm has a fairly steep slope (D2ED2"). The market share for both firms practically does not change, the total sales volume changes only at the expense of other industries. However, the growth in gross income associated with an increase in sales will be completely offset by its decrease associated with a decrease in price.

2) When one firm changes prices, the other does not respond to its actions - then the demand graph for the first has a flatter slope (D1ED1"). If a firm increases prices, then it loses part of the market (since some customers will move to competitors), but not the entire market, since the product is differentiated. Individual buyers, even with a certain increase in price, will prefer the products of firm 1 and it will not be completely forced out of the market. If a firm reduces prices, then it wins part of the market from competitors.

MR1FMR1" and MR2GMR2" - graphs marginal income of the company under study in both cases.

In reality, competitors will not choose a pure strategy of behavior - most likely, they will reduce prices when the first firm reduces prices, so as not to lose the market, but will not raise prices when the firm in question raises prices. Therefore, the demand curve for the company’s products will be broken, consisting of an elastic segment D1E and an inelastic segment ED2 (in the figure, the segments are united by a thick line). The firm's marginal revenue curve will also be sloping. Because of the sharp difference in the elasticity of the demand curve above and below the equilibrium price, there is a gap between the elastic leg of marginal revenue MR1 and its inelastic leg MR2. This gap FQ can be considered as a vertical segment of the marginal revenue curve MR1FQMR2" of the company in question. For any shift in the marginal cost curve within this vertical segment, the condition for profit maximization by the oligopolistic firm is ensured: MR = MC.

Figure 3 - Broken demand curve.

The kinked demand curve model explains price inflexibility in oligopoly. If at the initial equilibrium price P0 profits of oligopolistic firms are sufficient, then for none of them there is any point in changing this price, even with a certain increase in costs. Otherwise, either the market will be redistributed in favor of those firms that refrained from raising prices, or price competition will begin in the industry and all firms will reduce their profits. Thus, the position of the company that changed the price only gets worse.

4) Price leadership model

If firms prefer cooperation rather than aggressive competition, they may engage in deliberate parallelism practices.

One form of conscious parallelism is price leadership. The advantage of price leadership as opposed to cartels is that:

1. This form does not contradict antimonopoly legislation

2. Oligopolistic firms retain complete independence and freedom in their production and marketing activities.

Under conditions of price leadership, one of the firms in the industry receives the status of a price leader recognized by others, which regulates the price of products, raising or lowering it, and all other firms form its competitive environment, being essentially price takers (despite the fact that the price, unlike perfect competition, is set not the market, but the leading company).

The price leader takes the risk of being the first to begin adjusting prices to changed market conditions, assuming that other firms will follow his decision. If this does not happen and the follower firms do not agree to the price change, the price leader will suffer losses until it returns to the original price level. The significant risk of making the first decision determines the relative rigidity of prices in oligopolistic industries and their slight fluctuations.

There are two main forms of non-collusion price leadership:

1. Leadership of a price-dominant firm.

2. Leadership of the barometric company.

Leadership of a price dominant firm usually occurs when:

1) The firm controls a significant portion of production and sales and can influence the market through its own decisions.

2) The level of costs at the company's enterprises is the lowest in the industry (due to better technology, more advanced management, more qualified labor, etc.).

3) Differentiation of a company's products makes it stand out in the eyes of consumers (due to high quality, advertising, etc.).

The leading firm knows the industry demand curve and the supply curve of its competitive environment, it sets its preferred price as the current market price and allows competitors to trade freely at this price. Firms in a competitive environment determine the optimal volume of their output using the formula MC=MR, with MR equal to the price of the dominant firm.

Figure 4 - Leadership model of the dominant firm

A graphical model of the leadership of the dominant firm is presented in Fig. 4. Suppose that the leading firm estimates the market demand curve as D, and the supply of competitive firms as Sf (found by adding the individual marginal cost curves above the average variable costs of each competitive firm). Knowing the share of demand that competitive firms are ready to satisfy, the dominant firm estimates the demand curve for its products (the so-called residual demand curve) Dd.

For example, at price P1 and higher, competitors are able to satisfy all market demand, i.e. the residual demand of the dominant firm is zero. At price P2, the total market demand is equal to the segment P2C, the share of competitive firms is P2B, and the residual demand of the dominant firm is BC. If we plot point A on the segment P2C, so that BC = P2A, we will get a point on the residual demand curve of the dominant firm. The entire residual demand curve Dd is obtained in a similar manner. At a price below P3 (the level of minimum average variable costs of competitive firms), the dominant firm covers all market demand, since it is no longer practical for competitive firms to continue production. Thus, the complete demand curve of the dominant firm is the curve Dd plus the segment FD. The dominant firm finds the optimal production point and price by equating MCd=MRd and plotting the required quantity Qd on its demand curve. In the figure these are Qd and Pd. At a given price, total market demand is Qt units, the dominant firm has Qd units, and competitive firms are left with (Qt-Qd) units. Examples of price dominant firms include companies such as Frito-Lay and Pizza Hut. At one time, the price leader was IBM in the computer market and General Motors in the automobile industry, but the growth of competing firms weakened their dominant positions.

1) Avoid short-term profit maximization and focus on long-term profit maximization (this means setting relatively low prices to prevent the expansion of small firms and prevent new competitors from entering the market).

2) Actively use non-price forms of competition (releasing new products, reducing costs, improving customer service, etc.).

3) Focus on multi-product, diversified production (even if the products of the dominant company differ little from each other, this will prevent other companies from entering the market with similar products.

Barometric Firm Leadership

This form of leadership presupposes the existence of several approximately equal enterprises in the industry, so that none of them can impose their prices on others. Under these conditions, one of the firms in the industry becomes a price leader not because it has the largest market share or lowest costs, but because of its special ability to correctly monitor changes in the market situation (an upcoming rise or fall in prices for resources used by firms in the industry, changes prices for complementary or substitute goods). Thus, other companies in the industry perceive the actions of this company as an indicator or barometer of future conditions. However, the industry may not immediately accept the new prices, adhering to the strategy of wait and see.

The attractiveness of price leadership lies in its ability to eliminate an inflection point in the demand curve (see kinked demand curve model). A company that is a complete and recognized price leader can be sure that competitors will follow both an increase and a decrease in prices. Even for a barometric firm, which competitors do not always follow, the probability of eliminating a kinked demand curve is very high.

Price coordination and non-price competition in an oligopolistic competition market

The models of behavior of oligopolists that we have considered assume that prices of firms are equalized in the long term. Practice also confirms this. Even if firms have different levels of costs and different demands for their products, they are forced to sell the same products at the same prices, and differentiated products at comparable prices. Only in conditions of strong differentiation does it become possible to sell goods at higher prices.

To achieve mutually acceptable prices, oligopolists use:

Secret agreements;

Tacit agreement, or conscious parallelism (including in the form of price leadership);

Transmission of price information through means mass media etc.

At the same time, in an oligopolistic market there are a number of factors that impede price coordination:

Entry of new firms into the market, ignoring current customs and practices and destroying the existing relationships between sellers and buyers;

Instability of industry demand;

Technical innovations that change the costs of individual firms;

Changes in market shares held by individual firms;

Extreme product differentiation;

Frequent product changes;

The emergence of new industries in which firms have no time to adapt to the behavior of competitors, etc.

Price rigidity in an oligopoly forces firms to focus on non-price competition. Even with cost advantages, oligopolists do not seek to use lower prices to attract new customers.

Firstly, a price reduction by one of the firms may cause a response from its competitors.

Second, a firm's non-price advantages are more difficult to imitate and have a longer lasting effect.

The most commonly used forms of non-price competition include:

Strengthening product differentiation;

Increased quality of customer service;

Quality and specifications the product itself;

Credit terms;

Style and design;

Durability of use and warranty period;

Expansion of the product range.

Historically, Russian industry developed primarily as a large-scale industry. This situation arose back in Tsarist Russia, sharply intensified in the Soviet economy due to the bias in the creation of giant factories, and was inherited by modern Russia. Currently, competitive relations have formed in a number of industries; at the same time, there are monopolized industries and industries with an oligopolistic structure.

Many modern Russian oligopolies began to act in the market as “successors” of the largest Soviet enterprises, which usually included a parent plant and several related or supporting industries. In the Soviet economy, many types of products were produced by a single or several producers. So, for example, in mechanical engineering, a third of the industry’s product range at the end of the 1980s was produced by a single enterprise, and about another third by two enterprises, i.e. a third of Soviet mechanical engineering markets were monopoly markets, another third are duopoly. 2 The state production and economic system of the USSR was a single national economic complex with coordinated, as far as possible based on the compilation of intersectoral balances, rates and proportions of development.

The presence of large factories in the absence of large firms was a feature of the USSR economy. This phenomenon was atypical for economic developed countries, in which large corporations included many enterprises, often located in several countries. During the privatization process, a characteristic trend for the Russian economy remained: large factories, but small firms. During the redistribution of property, a trend is emerging that is characteristic of economically developed countries: the consolidation of firms.

The instability of oligopolistic markets is largely determined by the instability of property relations in oligopolistic enterprises. The historically short period of existence of currently operating oligopolistic structures, constant changes in the balance of forces between them, caused by changes in external and internal operating conditions, determine the processes of moving objects of property and spheres of influence from one oligopolists to others.

It is noteworthy that the primary distribution of property occurred not so much on the basis of natural selection during competition, but through bureaucratic channels. The primary redistribution of property in Russia did not automatically lead to the formation of an effective owner, since the rules and norms of effective management that minimized the amount of transaction costs were not provided. The magnitude of transaction costs depends on how clearly and unambiguously the delineation of property rights, their exclusive assignment and use is made, and, consequently, on the ability to preventively exclude unwanted interference by third parties in the use of these rights. Russia is characterized by a weaker specification of property rights than in developed countries. The lack of specification of property rights and its repeated redistribution leads to a decrease in the responsibility of property subjects.

In post-socialist countries at the initial stage of systemic transformations, there was a widespread opinion that the most important reason The crisis that broke out in them was the dominance of state property. Hopes for speedy privatization were associated with quick exit out of the crisis and improving the financial situation of enterprises. However, privatization, just like in Russia, did not lead to an increase in the efficiency of enterprises.

IN in this case the opinion of representatives of institutionalism is confirmed, according to which it is not the form of ownership, but the type of organization and management, the presence of a real competitive environment that determine the level of economic efficiency of production and the financial position of enterprises. From the point of view of increasing the efficiency of enterprises, according to S. Malle, the main goal of privatization is “the optimal distribution of responsibility for the results of production activities.” 3

A characteristic feature of the process of subsequent (late 90s of the twentieth century) redistribution of property in Russia was the use of legal gaps or illegal methods, such as the use of additional issues of shares, from the distribution of which minority shareholders were excluded; artificial increase in debt with subsequent assignment of debts; sham company reorganizations; manipulation of the register of shareholders in order to exclude “undesirables” from participation in decision-making; initiation of bankruptcy proceedings for minor debts to introduce controlled external management. In Russia there was a situation when, in the words of G.Ya. Yavlinsky, “... a relatively small but influential group of players used the existing environment of chaos to strengthen their personal position by acquiring even more attractive assets and establishing their own “corporate” form of social contract regarding the provision of property rights 4 .

Modern Russia is characterized by a fairly high level of ownership concentration. As noted in the World Bank report “Memorandum on the Economic Situation Russian Federation. From the economy of transition to the economy of development,” the modern Russian economy is characterized by the concentration of property in the hands of a few main players. 5 The report of the Accounts Chamber on the results of privatization provides expert assessments that in Russia “currently there is the highest level of concentration of private property in the world. That is, a situation has developed that is slowing down the processes of achieving competitiveness of the Russian economy. Formation of a layer of small and medium-sized owners and entrepreneurs who are in developed democratic states driving force economic development and the pillar of political stability did not take place.” 6

At the national level, a high level of ownership concentration can lead to a situation where a few private interest groups play a dominant role in the formation of economic policy, while the role of state institutions is reduced. Oligopolistic structures have better economic performance compared to the non-monopolized sector due to their greater suitability for operating in imperfect economic conditions. In this case, the thesis is confirmed that the less developed the market, the more advantages firms have big size, because they are better able to cope with risks and financial pressures and are more effective lobbyists. “When a few private agents control a large portion of cash flows or labor, it is easier for them to lobby, bribe or blackmail government officials in order to influence the activities of legal, political or regulatory institutions. Imperfect economic conditions are the “conduit” through which the concentration of ownership at the enterprise level merges with the concentration of ownership at the national level (including between industries). This is because the relative size of enterprises can distort competition.” 7

Foreign oligopolists did not remain aloof from the processes of property redistribution in Russia. They had great advantages in the loan capital market, because they relied on the incomparably more developed money market of the West, which provided them with a sufficient amount of funds. Russian enterprises, operating in the 90s of the twentieth century under conditions of severe financial restrictions, experienced a lack of financial resources not only for expansion, but also for conducting current production activities and became targets for takeovers.

Let us pay attention to such an objective factor that contributes to the displacement of domestic oligopolists from the market when their foreign competitors enter the Russian domestic market, such as higher operational efficiency, in particular, productivity. A comparison of the data allowed us to conclude that in such oligopolistic industries as aircraft manufacturing, automotive manufacturing, civil and transport engineering, rocket and space industry, petrochemicals, the labor productivity of oligopolists from economically developed countries is from 2 to 30 times higher than that of Russian oligopolists. Leading Russian oil and gas and steel oligopolists are several times inferior to world leaders in terms of volumes of products sold. Thus, LUKoil’s sales volume is 7 times less than that of Exxon-Mobil and 1.5 times less than that of the Brazilian Petrobras. The metallurgical "Severstal" lags behind ArcelorMittal from Luxembourg by 8 times and from the Brazilian Gerdau - by 1.7 times, in the chemical industry "Uralkali" from the German BASF by 100 times, but also from the Saudi Arabian Saudi Basic Industries by 27 times. Russian Sberbank is inferior to the American Citygroup by almost 11 times, and the Chinese ICBC - by 2.5 times. 8

The weakness of Russian oligopolists is especially noticeable if we compare individual Russian and foreign companies with similar turnover volumes, including from developing countries. Russia's leading oil producing company LUKoil has output per employee that is 3.6 times less than the state-owned Brazilian Petrobras. The Russian Severstal is 3.5 times inferior in productivity to the Chinese Shanghai Baosteel Group Corporation, 4 times inferior to the Brazilian Gerdau and more than 20 times inferior to the Japanese Nippon Steel. In the chemical industry, Uralkali is 24 times less productive than the Saudi company SABIC. The Russian leader in the automotive industry, AvtoVAZ, is 7 times inferior to the Indian automotive corporation Mahindra & Mahindra. Sberbank is 2.4 times less efficient than the Chinese Bank of China and 8 times less efficient than the Brazilian Banco do Brasil. With a turnover volume three times smaller, Sberbank employs 240 thousand people, while the Brazilian bank employs 83 thousand 9

An important factor is the often lower quality of products of domestic oligopolists. For example, the automobile giant KAMAZ has already stopped its assembly line three times during the current crisis, despite the almost permanent provision of large amounts of liquidity to it. The reason for the stops is lack of demand, overstocking. And no matter how much additional liquidity is provided to KAMAZ, it will not be able to launch the conveyor if there are no prospects for selling its products. The situation is similar with other corporations. 10

At the beginning of the 21st century, another stage of redistribution of ownership of oligopolistic enterprises is observed. Oligopolistic industries, in which the majority of enterprises are primarily owned by Russian citizens, include some mechanical engineering enterprises and raw materials industries. There are also oligopolistic industries in which both domestic and foreign enterprises operate. These industries include the automotive industry and a number of enterprises in the raw materials industries. At the same time, entire areas of activity are emerging in which Russian manufacturers are practically not represented. For example, on Russian market Information technologies are competed mainly by foreign oligopolists - IBM, Microsoft, Motorola, Intel, etc.

Characteristic for modern stage is the purchase of shares of machine-building enterprises by large metallurgical companies and organizations controlled by them, including as a result of bankruptcies of machine-building enterprises, the unification into groups of enterprises of various sub-sectors of machine-building under the auspices of large machine-building corporations, etc. Centralization is realized not only through the founding of giant companies, but also as a result of mergers and acquisitions. The consolidation of firms occurs not only as a result of intra-industry, but also inter-industry pools of capital.

The share of intra-industry mergers and acquisitions (i.e. those in which the buyer and seller are engaged in the production and sale of competing goods, and the merger of which leads to an increase in economic concentration) accounted for about 40% of all transactions and actions subject to government control over economic concentration . The share of intra-industry mergers and acquisitions is especially high in mechanical engineering (more than 60%), food industry (more than 60%), electric and heat power (more than 75%), communications (100%), which indicates increasing concentration in these industries. eleven

The desire of companies to create a unified production and technological complex necessitates the inclusion in the association of organically complementary enterprises that this moment may even be unprofitable, since the most important quality of an enterprise that is part of a group is its ability to complement other elements of the system. Thus, ensuring the effective functioning of the company as a system and its further balanced development comes to the fore. Such concentration of production, which is not always relevant from the point of view of competition law, is of significant geopolitical interest, especially when acquisitions are carried out compactly, in one or several adjacent administrative territories. World Bank experts note that a large group of holding companies is emerging in Russia, which have begun to separate from their main industries, expand their business activities and compete throughout the economy, creating industries and sub-sectors that move further and further from their original type of activity. Some view this phenomenon as a desirable prerequisite for a faster restructuring of the entire economy, while others believe that financial-industrial groups have a stranglehold on entire sectors of the economy or regions. 12

During the period of economic crisis, opportunities arise for the real inclusion of the state in the number of owners of oligopolistic structures, increasing the share of foreign capital in the ownership structure of oligopolistic enterprises. The crisis of 2008-2010 gave impetus to new redistribution processes of ownership, including for oligopolistic enterprises.

A specific feature of the 2008 crisis (in contrast to the 1997-1998 crisis) is the active participation of the state in the process of property redistribution. The current situation is diametrically opposed to the period of loans-for-shares auctions (November - December 1995), when the government, in order to replenish the budget, provided the oligopolists with shares of 12 large Russian enterprises as collateral (YUKOS, LU-KOIL, Surgutneftegaz, Sibneft, " Norilsk Nickel”, “Novolipetsk Metallurgical Plant”, etc.), but in not a single case were the “pseudo-loans” returned, which meant the actual privatization of these stakes at greatly reduced prices. In 2008, the state showed its readiness to refinance external loans from state-owned companies and the private sector, failure to fulfill obligations under which could lead to the loss of national control over strategic assets. Scientists predict an increase in the state's share in the corporate sector in 2009-2010 from 3-4 to 9-10% only due to allocated funds for interventions in the stock market. 13

Thus, to date, three types of oligopolists have been identified according to the criterion of the form of ownership: oligopolists with state participation in ownership banking sector; leading private fuel and energy companies, mechanical engineering enterprises, large diversified corporations; branches of the largest foreign oligopolists. In an effort to ensure stability during the economic crisis, oligopolists different areas behave differently.

Oligopolists of the first group force consumers to accept new price levels and actively use administrative resources.

The position of the oligopolists of the second group is more complex. They are faced with the task of maintaining control over assets when applying for government assistance (GAZ, AvtoVAZ). To obtain government assistance during the economic crisis of 2008-2010, oligopolists resorted to various methods. N. Krichevsky and V. Inozemtsev identify the following methods of pressure by Russian oligarchic structures on government bodies during a crisis in order to obtain financial support: the threat of negative consequences of the transfer of control over assets to foreign creditors; insistence on inclusion in the lists of strategic enterprises and participation in the distribution of funds allocated for the implementation of the government’s anti-crisis program; obtaining guarantees for projects that suit bureaucrats; pressure on the state through provoking protests. 14 The condition for the further development of oligopolists in this group should be an increase in operating efficiency and a reduction in the level of transaction and transformation costs.

The position of the third group of oligopolists is relatively favorable. Using the “flow of competencies” received free of charge from the parent company, they can strengthen their position in the Russian market, displacing Russian oligopolists.

Thus, in modern conditions Russia is characterized by a process of constant redistribution of ownership of oligopolistic enterprises that form the basis of the national economy. The task of the authorities in an unstable economic situation should be related to preventing the establishment of control of foreign capital in strategic sectors of the national economy, as well as preventing the ruin of oligopolists that are budget-forming or strategically important enterprises.

Of course, in order to preserve oligopolistic companies that form a significant part of the consolidated budget, it is necessary to provide them with government support. All economically developed countries adhere to a similar policy in relation to the largest national companies. At the same time, it is necessary to separate the interests of the state from the interests of oligopolistic structures and, when providing financial support, convert the assistance into controlling stakes; do not provide support to offshore holding structures; start buying up the debts of oligopolists at discounts; conduct comprehensive audits of the activities of owners and management over previous years; initiate bankruptcy procedures and introduce receivership. This will allow preserving the country's largest oligopolistic companies without infringing on national interests.

Oligopoly - a market structure in which there are several sellers, each of whom has such a large share of total sales that a change in the quantity offered by each seller leads to a change in price.

There are two types of oligopoly:

1) the first assumes that several enterprises produce an identical product;

2) the second assumes that several manufacturers produce differentiated products.

However, in both cases, manufacturers are aware of the interdependence of their sales, production volumes, and investments. So, if one company participates in the creation of a new product model, then it should certainly expect similar actions from competitors. In such a situation, each firm knows that at least some of its competitors' decisions depend on its own behavior. Therefore, when making this or that decision, she is obliged to take this circumstance into account.

The oligopolistic interdependence of firms raises the rivalry between them to a qualitatively new level and turns competition into a constant struggle. In this case, a wide variety of decisions by competitors are possible: they can jointly achieve certain goals, turning the industry into a kind of pure monopoly, or fight each other.

The latter option is most often carried out in the form of a price war - a gradual reduction in the existing price level in order to oust competitors from the oligopolistic market. If one company has reduced its price, then its competitors, sensing the outflow of customers, will, in turn, also reduce their prices. This process may have several stages. But price reductions have their limits. This is possible until the prices of all firms are equal in terms of average costs. In this case, the source of economic profit will disappear and a situation close to perfect competition will arise. From such an outcome, consumers remain in an advantageous position, while producers, one and all, do not receive any benefit. Therefore, most often, competitive struggle between firms leads to their making decisions based on taking into account the possible behavior of their rivals. In this case, each of the firms puts itself in the place of its competitors and analyzes what their reaction would be.

Interaction of firms in the market under oligopoly conditions

Firms operating within an oligopolistic market structure strive to create a system of connections that would allow them to adjust behavior in the common interest. One form of such coordination is so-called price leadership. It lies in the fact that changes in reference prices are announced by a certain company, which is recognized as the leader by all others that follow it in the pricing policy.

Depending on the situation, some oligopolies may act much like perfectly competitive markets, having prices equal to or close to marginal costs. Others, with or without an open agreement, may operate more like monopolies, charging prices above marginal cost and resulting in large losses.