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
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