Game Theory and Industrial Organization

Columbia University Department of Economics: Discussion Paper No. 9900-03

52 Pages Posted: 20 Oct 2000  

Kyle Bagwell

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Asher Wolinsky

Northwestern University - Department of Economics

Date Written: April 3, 2000

Abstract

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.

JEL Classification: C7, L1

Suggested Citation

Bagwell , Kyle and Wolinsky, Asher, Game Theory and Industrial Organization (April 3, 2000). Columbia University Department of Economics: Discussion Paper No. 9900-03. Available at SSRN: https://ssrn.com/abstract=239431 or http://dx.doi.org/10.2139/ssrn.239431

Kyle Bagwell (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Asher Wolinsky

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

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