CHAPTER 14
Oligopoly and Strategic Behav
• Pure competition and pure monopoly are the exceptions, not the rule, in the U.S. economy. In
the two market structures that fall between the extremes is discussed. Oligopoly is a blend o
less competition than we find in monopolistic competition.
• Oligopoly is examined on possible choices of price, output, and advertising behavior that oligo
Then, oligopoly is assessed as to whether it is an efficient or inefficient market structure. The L
companies now compete with one another via the Internet as very competitive oligopolists.
, Chapter Contents
Oligopoly
Oligopoly Behavior: A Game-Theory Overview
Three Oligopoly Models
Oligopoly and Advertising
Oligopoly and Efficiency
Game Theory and Strategic Behavior
,Learning Objectives
LO14.1 Describe the characteristics of oligopoly.
LO14.2 Discuss how game theory relates to oligopoly.
LO14.3 Explain the three main models of oligopoly pricin
LO14.4 Contrast the potential positive and negative effe
LO14.5 Discuss the efficiency of oligopoly.
LO14.6 Use additional game-theory terminology and de
find a Nash equilibrium.
, Oligopoly
A few large producers
Homogeneous oligopoly
Differentiated oligopoly
Limited control over price
Strategic behavior
Mutual interdependence
Entry barriers and mergers
Oligopoly and Strategic Behav
• Pure competition and pure monopoly are the exceptions, not the rule, in the U.S. economy. In
the two market structures that fall between the extremes is discussed. Oligopoly is a blend o
less competition than we find in monopolistic competition.
• Oligopoly is examined on possible choices of price, output, and advertising behavior that oligo
Then, oligopoly is assessed as to whether it is an efficient or inefficient market structure. The L
companies now compete with one another via the Internet as very competitive oligopolists.
, Chapter Contents
Oligopoly
Oligopoly Behavior: A Game-Theory Overview
Three Oligopoly Models
Oligopoly and Advertising
Oligopoly and Efficiency
Game Theory and Strategic Behavior
,Learning Objectives
LO14.1 Describe the characteristics of oligopoly.
LO14.2 Discuss how game theory relates to oligopoly.
LO14.3 Explain the three main models of oligopoly pricin
LO14.4 Contrast the potential positive and negative effe
LO14.5 Discuss the efficiency of oligopoly.
LO14.6 Use additional game-theory terminology and de
find a Nash equilibrium.
, Oligopoly
A few large producers
Homogeneous oligopoly
Differentiated oligopoly
Limited control over price
Strategic behavior
Mutual interdependence
Entry barriers and mergers
