Notes Toward a Simplified Pedagogy of Oligopoly Theory

Cheung, Stephen L.

Notes Toward a Simplified Pedagogy of Oligopoly Theory

Innovation for Student Engagement in Economics: Proceedings of the Eleventh Australasian Teaching Economics Conference, Stephen L. Cheung, ed., pp. 13-22, 2005

10 Pages Posted: 7 Jun 2006

See all articles by Stephen L. Cheung

Stephen L. Cheung

The University of Sydney; IZA Institute of Labor Economics

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.

Keywords: Economics pedagogy, Oligopoly theory

JEL Classification: A22, A23, D43, L13

Suggested Citation: Suggested Citation

Cheung, Stephen L., Notes Toward a Simplified Pedagogy of Oligopoly Theory. Innovation for Student Engagement in Economics: Proceedings of the Eleventh Australasian Teaching Economics Conference, Stephen L. Cheung, ed., pp. 13-22, 2005, Available at SSRN: https://ssrn.com/abstract=906682