If firms are competing using Game Theory, what is another Oligopoly model they might switch to?
a.Nonprice Competition
b.The Kinked Demand Curve
c.Price Leadership
Answer:
I believe all of these models have been modeled using game theory, so it really gets down to what your instructor said. An introductory class probably didn't' get into first-mover advantage (or disadvantage, as the case may be), and probably avoided competing on quality (which isn't specific to oligopoly, anyway). I'd go with (b), as that is the standard answer. But you might go for even more Brownie Points by pointing out that (a) and (c) could be modeled using game theory, and without knowing which game theorist the different oligopolists hired, it would be impossible to know what model they are using and which one they might switch to.
kinked demand curve is the classic example of oligopoly game.
But other two can be and are modelled as games in academic work. There is simply no other way to model oligopoly.
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b.The Kinked Demand Curve
c.Price Leadership
Answer:
I believe all of these models have been modeled using game theory, so it really gets down to what your instructor said. An introductory class probably didn't' get into first-mover advantage (or disadvantage, as the case may be), and probably avoided competing on quality (which isn't specific to oligopoly, anyway). I'd go with (b), as that is the standard answer. But you might go for even more Brownie Points by pointing out that (a) and (c) could be modeled using game theory, and without knowing which game theorist the different oligopolists hired, it would be impossible to know what model they are using and which one they might switch to.
kinked demand curve is the classic example of oligopoly game.
But other two can be and are modelled as games in academic work. There is simply no other way to model oligopoly.
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