578 Miller Economics Today, Nineteenth Edition
Chapter 26 Oligopoly and Strategic Behavior
Economies of Scale in Payments Processing and the Development of Oligopoly
Automated Clearing Houses (ACHs) process both private payments, such as automatic deposits to wage-
earners bank accounts, and public payments, such as direct deposits of Social Security stipends. The 12
The Merger Movement in the U.S. Airline Industry
Since the terrorist attacks on September 11, 2001, the airline industry has suffered a number of setbacks.
Initially, the new security regulations and resulting long waits in airports along with a reluctance to fly by
many members of the public resulted in a large drop in passengers. The result was excess capacity in the
industry. Airlines began to engage in vigorous price competition. A consequence was that many airlines saw
a decrease in profits as ticket prices dropped below average costs. By 2005, the industry had gotten smaller
Lecture Extender Examples 579
The Cooperative Game of Sports Licensing
It is a Sunday in late November, which means that college football teams will be pitted against their most
hated rivals. Auburn fans will attend tailgate parties wearing t-shirts depicting the Auburn tiger mascot
Market Concentration in the Computer Printer Industry
Although various software developments make it easier to work with electronic files than with physical
documents, most people still use printers to transform into print. To do so, they use computer printers and
Giving Away Services on the Web: Thwarting an Emerging Rival,
Limit Pricing, or Both?
eBay, the Internet auctioneer, earns revenues by assessing commissions based on sales prices. It is a popular
site for selling anything from concert tickets to antiques. It is so popular, in fact, that some businesses
eBay got into the Web advertisement business. This development alarmed Yahoo! and other Internet
580 Miller Economics Today, Nineteenth Edition
DHL Express Decides to Pull Out of the U.S. Domestic
Express Package Delivery Market
In 2008, the German-owned DHL Express decided that it could no longer compete with FedEx and UPS
in the U.S. domestic package delivery market. The company had lost more than $1 billion a year in 2006
A Textbook Case of Oligopoly
In 1990, the four-firm concentration ratio in the U.S. textbook industry was about 40 percent. The top
four firms had an average of about 10 percent of the textbook market. The other 60 percent of textbook
sales
output. Today, the four-firm concentration ratio is about 70 percent as a result of a wave of mergers. The
smallest firm has about a 5 percent share of the market. The three largest firms, McGraw-Hill, Pearson