Oligopolies

Paper Summary:

In an oligopoly there are four major settings based under the assumption of how rivals in a market will respond to prices or production changes. This paper explores the four main kinds of oligopolies: Sweezy, Cournot and Cournot Duopoly, Stackelberg and Bertrand oligopoly. This paper also explores the efficiency of each of these oligopolies from a managerial perspective.

From the Paper:

"The main five factors that are taken into account for a firm to be considered Stackelberg oligopoly is few firms, differentiated or homogeneous products, one leader (a firm) sets the output level before other firms, all the other firms follows and barriers to entry. Given the output the market leader, the other firms will choose the output that will maximize profits. There are some more restrictions when dealing with a Stackelberg oligopoly. As a market leader the firm must know that the firm following will make their move to maximize profits and therefore must set the bar high enough for them to book maximum profit. A follower must commit to a follower action the same way a market leader must commit to leader action."

Sample of Sources Used:

• Baye, Michael' R. Managerial Economics and Business Strategy. 5th ed. New York: McGraw-Hill, 2006. 315-336.
• "Bertrand Competition." Wikipedia. June 2006. 5 Dec. 2006 <http://en.wikipedia.org/wiki/bertrand_competition>.
• Friedman, James W. "Oligopoly: Encylopedia of Business and Finance." Oligopoly Theory. 1983. Kingbridge university press. 5 Dec. 2006 <http://business.enotes.com/business~finance~encylopedia/ oligopoly>.
• McConnell, Campbell R., and Stanley L. Brue. Macroeconomics: Principles, Problems, and Policies. 7th ed. New York: McGraw-Hill, 2005. 79.
• McConnell, Campbell R. Economics. 15th ed. New York: McGraw-Hill, 2002. 493-495.

More papers on Oligopolies:

• Essay # 5248 : "Monopolies, Monopolistic Competition and Oligopolies"
• Comparison Essay # 149164 : "Monopolies, Oligopolies and Cartels"
• Research Paper # 8167 : "Oligopoly Markets"

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