mutual interdependence

mutual interdependence

a form of INTERFIRM CONDUCT pattern in which some or all of the firms in a market formulate their COMPETITIVE STRATEGY in the light of anticipated reactions and countermoves of rival firms. The actions of firms both affect and are affected by each other - the situation is circular. A price cut, for example, may appear to be advantageous to one firm considered in isolation, but if this results in other firms cutting their prices also in order to protect their sales, then all firms may suffer reduced profits. Accordingly, firms may seek to avoid price competition, employing such mechanisms as PRICE LEADERSHIP to coordinate their prices. The same mutual interdependence considerations may apply to other areas of competition; for example, if one firm increases its advertising expenditures, other firms may follow suit to protect their market shares.

Such interdependence exists in market situations, typically in an oligopolistic market (see OLIGOPOLY), where the leading firms each supply a significant proportion of total market supply. See also CARTEL, PRICE WAR, DUOPOLY, PRODUCT DIFFERENTIATION, GAME THEORY, KINKED DEMAND CURVE, LIMIT PRICING.

References in periodicals archive ?
The peoples of Pakistan and Afghanistan, she said, are bound by the unbreakable ties of history, faith, blood and language, as well as mutual interdependence.
However India protests, it won't affect the process of the initiative, or alter the historic trend of increasing mutual interdependence between China and regional counties.
The "glass half-full" perspective shapes another vision, one of mutual interdependence.
That is to say, there exists now a mutual interdependence between science and education.
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The essay shows how Ryle specifies the general notion into knowledge-how and knowledge-that, and it discusses the mutual interdependence exhibited by the two forms of knowledge.
Gwadar port can revive the economy of Pakistan under the fast growing mutual interdependence between the two countries.
Jaffe argues that the novel's "realist fantasy" forms through this "simultaneously accessible and always slightly out of reach" reality and "offer[s] what have long been understood as the particular pleasures of realist reading": the mutual interdependence of coherent reader identity and coherent "social space" (25).
It is destined to bring significant improvement in the lives of hundreds of millions of people, besides further promoting mutual interdependence among regional states," he added.
We will study alterations of components and networks over time and upon defined perturbations and mutual interdependence of network and component characteristics.
In today's interconnected world marked with growing mutual interdependence, this is not a choice; rather it is an inescapable necessity.
Second, an ASIA that can compete at equal footing or even at an advantage with the European Union and the Americas; bringing not a stalemate but a global progress based on mutual interdependence and respect for each other.

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