Market Structure Games: Static Approaches

Abstract

This chapter discusses static market structure games. It begins by describing the benchmark case of a monopolist, developing the basic building blocks for subsequent models. It then introduces static models of duopoly, presenting first the case of Bertrand price competition and then discussing the classic Cournot quantity duopoly model. Next, it extends the standard Cournot quantity competition analysis to accommodate a larger number of firms in oligopoly, obtaining the market equilibrium in perfect competition as a polar case. Finally, it explores the impact of incomplete information on market structure in a duopoly.