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For more information, please see full course syllabus of AP Microeconomics
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Lecture Comments (9)

1 answer

Last reply by: Professor Jibin Park
Sun Jul 30, 2017 12:14 AM

Post by Carlins Almonor on July 29, 2017

On the slide regarding collusion, when you say "With more and more firms, there exists less incentive for a firm to cheat," what do you mean by cheating? Is there less incentive for a firm to create and join a cartel, or is there less incentive to break the deal imposed by the cartel?

1 answer

Last reply by: Professor Jibin Park
Sun May 8, 2016 2:18 PM

Post by BEATRIZ PENATE on May 1, 2016

Hello! I see as explaining  the game theory that the profit reported makes the players make a choice. However, if I am creating for a test a matrix, how do I get the correct number that will allow me to make an interpretation of their strategies?

1 answer

Last reply by: Professor Jibin Park
Wed May 6, 2015 7:35 PM

Post by Mitchell Rosado on April 29, 2015

Would you say oligopoly can gain economic profit

1 answer

Last reply by: Professor Jibin Park
Wed Apr 29, 2015 8:21 PM

Post by Mitchell Rosado on April 29, 2015

Would you say oligopoly can gain economic profit?

0 answers

Post by Professor Jibin Park on May 3, 2014

Dominant strategy is when you choose the same regardless of what the other player chooses!

Oligopoly & Game Theory

  • In an oligopoly, there are a few firms that dominate the market.
  • Out of all market structures, collusion works best in an oligopoly as there are so few firms.
  • Game Theory is most easily understand in a two-player game with two possible choices.
  • In a prisoner’s dilemma, there exists a dominant strategy that, when played, will lead to the Nash Equilibrium.
  • Even though the best group outcome is to cooperate, individual self-interest is such that in a prisoner’s dilemma, each person benefits from not cooperating given the choice of his or her opponent.
  • Other game theory models exist such as chicken, one dominant strategy/no dominant strategy.

Oligopoly & Game Theory

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Lesson Overview 0:08
  • Characteristics of an Oligopoly 1:06
    • Interdependence
    • Few Sellers with Significant Control of Pricing
    • Duopoly
    • Incentive to Collude
    • Cartel
  • Game Theory 3:33
    • Two-Player Model
    • Application sin Economics, Military Strategy, Politics
    • Nash Equilibrium
  • Game Theory (Prisoner's Dilemma) 5:31
    • Dominant Strategy
    • Prisoner's Dilemma
  • Game Theory (Chicken) 12:37
  • Game Theory (One Dominant, One Not) 19:54
  • Overcoming Prisoner's Dilemma 26:29
    • Strategic Behavior
    • Tit for Tat Strategy
    • Tacit Collusion
    • Collusion
  • (Yet Another) Game Theory Example 1 29:14
  • (Yet Another) Game Theory Example 2 33:02
  • (Yet Another) Game Theory Example 3 34:40
  • (Yet Another) Game Theory Example 4 37:12
  • Final Game Theory Example 1 39:21
  • Final Game Theory Example 2 41:39
  • Final Game Theory Example 3 43:10
  • Final Game Theory Example 4 45:29