Game Theory and Industrial Organization
Stanford University - Department of Economics; National Bureau of Economic Research (NBER)
Northwestern University - Department of Economics
April 3, 2000
Columbia University Department of Economics: Discussion Paper No. 9900-03
In this article, we consider how important developments in game theory have contributed to the theory of industrial organization. Our goal is not to survey the theory of industrial organization; rather, we consider the contribution of game theory through a careful discussion of a small number of topics within the industrial organization field. We also identify some points in which developments in the theory of industrial organization have contributed to game theory. The topics that we consider are: commitment in two-stage games and the associated theories of strategic-trade policy and entry deterrence; asymmetric-information games and the associate theories of limit pricing and predation; repeated games with public moves and the associated theory of collusion in markets with public demand fluctuations; mixed-strategy equilibria and purification theory and the associated theory of sales; and repeated games with imperfect monitoring and the associated theory of collusion and price wars. We conclude with a general assessment concerning the contribution of game theory to industrial organization.
Number of Pages in PDF File: 52
JEL Classification: C7, L1
Date posted: October 20, 2000
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