Notes Toward a Simplified Pedagogy of Oligopoly Theory
Stephen L. Cheung
The University of Sydney; Institute for the Study of Labor (IZA)
Innovation for Student Engagement in Economics: Proceedings of the Eleventh Australasian Teaching Economics Conference, Stephen L. Cheung, ed., pp. 13-22, 2005
The standard exposition of duopoly in most intermediate microeconomics texts relies heavily on simplifying assumptions of linearity, yet it remains algebraically somewhat dense. In this note, I outline an alternative graphical approach that makes use of the same assumptions, but which may be more transparent to students with limited mathematical backgrounds. I apply this approach to developing quantity best-response functions in the Cournot model, the effective demand function facing a Stackelberg leader, and the price best-response functions in the differentiated-products Bertrand model.
Number of Pages in PDF File: 10
Keywords: Economics pedagogy, Oligopoly theory
JEL Classification: A22, A23, D43, L13
Date posted: June 7, 2006
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