Oligopoly and Industrial Organization

This is a chapter of a book manuscript entitled Topics in Microeconomics . Comments, criticism and recommendations are welcome. The chapter starts with an elementary introduction to the three basic oligopoly theories, associated with the names of Cournot, Bertrand and Stackelberg. These theories are then covered in depth, including generalizations, extensions to entry, exit, and capacity choice, and applications. The chapter concludes with a justi cation of the Cournot model from a more plausible multistage game that builds upon Edgeworth's model of capacity constrained price competition. The chapter is restricted to the basic, complete information theory of oligopoly. The role of incomplete information in oligopoly theory is covered in a separate chapter. filename: oligo-p.tex 1 \Where are you going?" \To Minsk." \Shame on you! You say this to make me think you are going to Pinsk. But I happen to know you are going to Minsk."|A Jewish Anecdote1