Game Theory and Oligopolistic Competition

Game Theory > Forum Log in

Game Theory and Oligopolistic Competition
Jean Pauyo, USA
Game theory can be used to analyze decision-making process of firms in oligopolistic competition. When there are few firms in a market, it is easy for each firm to guess (predict) what the other firms will do in a given situation. For example, without any illegal price-fixing scheme, the leader of the market can fix its price and level of production and expect the competitors to follow its lead and not engage in price cutting strategies that will put all in a bad position.
That's why, in an oligopolistic market, it's NOT possible to reach the equilibrium price of the free market theory. In fact, because most market are in oligopolistic competition, due to differentiation, most firms have the ability to fix their prices more or less.



  Do you wish to study further? You can learn more from the summary, forum, discussions, lessons, courses, training, instructions, expert tips, best practices and education sources. Register.  

Special Interest Group Leader

You here

More on Game Theory
Best Practices

Expert Tips


About 12manage | Advertising | Link to us | Privacy | Terms of Service
Copyright 2017 12manage - The Executive Fast Track. V14.1 - Last updated: 17-12-2017. All names tm by their owners.