Oligopoly Pricing

The oligopoly problemthe question of how prices are formed when the market contains only a few competitorsis one of the more persistent problems in the history of economic thought. In this book Xavier Vives applies a modern game-theoretic approach to develop a theory of oligopoly pricing. Vives begins by relating classic contributions to the fieldincluding those of Cournot Bertrand Edgeworth Chamberlin and Robinsonto modern game theory. In his discussion of basic game-theoretic tools and equilibrium he pays particular attention to recent developments in the theory of supermodular games. The middle section of the book an in-depth treatment of classic static models provides specialized existence results characterizations of equilibria extensions to large markets and an analysis of comparative statics with a view toward applied work. The final chapters examine commitment issues entry information transmission and collusion using a variety of tools: two-stage games the modeling of competition under asymmetric information and mechanism design theory and the theory of repeated and dynamic games including Markov perfect equilibrium and differential games.