Notes toward a simplified pedagogy of oligopoly theory
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Open Access
Type
Conference paperAuthor/s
Cheung, Stephen L.Abstract
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.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.
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Date
2005-01-01Publisher
School of Economics and Political Science, The University of SydneyCitation
Innovation for Student Engagement in Economics: Proceedings of the Eleventh Australasian Teaching Economics Conference, Ed. Stephen L. Cheung, pp. 13-22Share