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Oligopoly Pricing : Old Ideas and New Tools - Xavier Vives

Oligopoly Pricing

Old Ideas and New Tools

Paperback Published: 3rd September 2001
ISBN: 9780262720403
Number Of Pages: 448
For Ages: 18+ years old

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The "oligopoly problem"--the question of how prices are formed when the market contains only a few competitors--is 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 field--including those of Cournot, Bertrand, Edgeworth, Chamberlin, and Robinson--to 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.

Industry Reviews

"An exceedingly careful and thorough treatment of the theoretical stock of knowledge on imperfect competition by one of the best oligopoly theorists of his generation....Its comprehensive coverage and attention to theoretical foundations and to proving results rigorously and with utmost generality means that scholars, not just students, will benefit from reading it." - Joseph Harrington, Professor of Economics, Johns Hopkins University

Prefacep. xi
Ideas of the Founding Fathers: Oligopoly Theory and Modern Game Theoryp. 1
Game Theory Toolsp. 11
Games in Normal Form and Nash Equilibriump. 12
Supermodular Games and Lattice Programmingp. 16
Lattices and Tarski's Theoremp. 17
Monotonicity of Optimal Solutions, Lattice Programming, and Complementarityp. 23
Supermodular Gamesp. 31
Existence Results for Quasi-increasing and Decreasing Best Repliesp. 39
Quasi-increasing Best Replies in Symmetric Gamesp. 39
Decreasing Best Replies in n-Player Gamesp. 42
Mixed Strategiesp. 44
Uniquenessp. 47
Stabilityp. 49
Dominance Solvability and Rationalizabilityp. 49
Tatonnement Stabilityp. 50
Incomplete Information and Bayesian Nash Equilibriump. 58
Lattice Programming under Uncertaintyp. 58
Information Structures and Signalsp. 61
Bayesian Equilibriump. 65
Summaryp. 69
Exercisesp. 70
Foundations of Partial Equilibrium Analysisp. 75
A Canonical Partial Equilibrium Modelp. 75
Small Expenditure Shares and Small Income Effectsp. 77
Consumer Surplus Analysisp. 85
Summaryp. 90
Exercisesp. 90
Quantity Competition: The Cournot Modelp. 93
The Model and Existence of Equilibriump. 93
Characterization of Smooth Cournot Gamesp. 96
Comparative Statics and Entryp. 101
Comparative Staticsp. 101
Entryp. 107
Large Marketsp. 110
Summaryp. 112
Exercisesp. 113
Price Competition: The Models of Bertrand and Edgeworthp. 117
Bertrand Competitionp. 117
Bertrand-Edgeworth Competitionp. 123
Rationing Rules and Contingent Demandp. 124
Equilibria: The Existence Problemp. 126
Mixed Strategiesp. 128
Price Competition and the Cournot Modelp. 132
Large Bertrand-Edgeworth Marketsp. 136
Concluding Remark: The Rationale for Mixed Strategiesp. 137
Summaryp. 138
Exercisesp. 138
Product Differentiationp. 143
Demand Systemsp. 144
Quantity and Price Competitionp. 148
Characterization and Comparison of Cournot and Bertrand Equilibriap. 154
Large Markets and Monopolistic Competitionp. 160
Bertand-Edgeworth-Chamberlin Competitionp. 164
Monopolistic Competition and Entryp. 167
Product Selection and Complementary Productsp. 176
Summaryp. 177
Exercisesp. 178
Conjectures, Reactions, and Commitmentp. 185
Conjectural Variationsp. 185
Supply Functionsp. 187
Capacity Determining Competitive Supplyp. 190
Choice of Strategy Spacep. 192
Discussionp. 196
Collusion and Facilitating Practicesp. 197
Commitment and Pricingp. 199
The Stackelberg Modelp. 200
Entry Deterrence, Limit Pricing, and Incumbency Advantagesp. 205
A Taxonomy of Strategic Behaviorp. 213
Summaryp. 219
Exercisesp. 220
Competition with Asymmetric Informationp. 225
Static Competition with Incomplete Informationp. 225
Existence of Bayesian Equilibriump. 229
The Linear-Normal Modelp. 230
Monopolistic Competition with Private Informationp. 234
Information Sharingp. 237
Information Exchange in Oligopolyp. 237
Monopolistic Competition: Trade Associations and Disclosure Rulesp. 245
Welfare Analysisp. 248
Strategic Information Transmissionp. 252
Information Exchange, Collusion, and Mechanism Designp. 262
Mechanism Design and Collusionp. 263
Collusion in a Cournot Marketp. 264
Collusion in a Large Marketp. 269
Information Sharing in Large Marketsp. 273
Commitment under Uncertainty and Information Manipulationp. 277
Uncertainty, Flexibility, and Commitmentp. 277
Observability, Commitment, and Private Informationp. 279
Limit Pricing and Signaling Distortionsp. 284
Price Setting and Information Manipulationp. 288
Summaryp. 293
Exercisesp. 294
Repeated Interaction and Dynamicsp. 301
Repeated Interaction and Collusionp. 301
Finite Horizonp. 302
Infinite Horizonp. 305
Uncertainty and Imperfect Monitoringp. 313
Collusive Pricing and Fluctuationsp. 316
Private Information, Communication, and Collusionp. 319
Discussionp. 322
Dynamic Pricing and Commitmentp. 323
Alternating Move Duopoly Gamesp. 325
A Taxonomy of Strategic Behavior with Adjustment Costsp. 330
Commitment and Pricing in Continuous Timep. 336
Summaryp. 347
Exercisesp. 348
Epiloguep. 353
Notesp. 359
Referencesp. 385
Indexp. 415
Table of Contents provided by Syndetics. All Rights Reserved.

ISBN: 9780262720403
ISBN-10: 026272040X
Series: Mit Press
Audience: Professional
For Ages: 18+ years old
Format: Paperback
Language: English
Number Of Pages: 448
Published: 3rd September 2001
Country of Publication: US
Dimensions (cm): 22.86 x 14.61  x 2.54
Weight (kg): 0.59