The bigger a firm is, the more efficient. Therefore, bigger and fewer firms in the market should mean lower prices and more goods produced. However, as we can see everyday, this is not really the case, since firms can be greedy. In this first Learning Path on Oligopolies, we’ll see what oligopolies are, and how their behaviour affects the economy. We’ll also see what different types of duopolies there are, and which ones are best suited to analyse this kind of market structure.
In this LP, we’ll look at:
Basic definitions:
Oligopoly, when few firms have great power;
Duopoly, a market structure with only two firms.
Types of duopoly:
Cournot duopoly, the analysis of simultaneous duopolies;
Stackelberg duopoly, the analysis of sequential decision making;
Bertrand duopoly, which analyses price competition;
Edgeworth duopoly, which solved the Bertrand paradox.
