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Oligopoly Dynamics

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  • Bernardo Melo Pimentel

Abstract

The present notes summarise the oligopoly dynamics lectures professor Lu\'is Cabral gave at the Bank of Portugal in September and October 2017. The lectures discuss a set industrial organisation problems in a dynamic environment, namely learning by doing, switching costs, price wars, networks and platforms, and ladder models of innovation. Methodologically, the materials cover analytical solutions of known points (e.g., $\delta = 0$), the discussion of firms' strategies based on intuitions derived directly from their value functions with no model solving, and the combination of analytical and numerical procedures to reach model solutions. State space analysis is done for both continuous and discrete cases. All errors are my own.

Suggested Citation

  • Bernardo Melo Pimentel, 2020. "Oligopoly Dynamics," Papers 2005.13228, arXiv.org.
    • Handle: RePEc:arx:papers:2005.13228
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    File URL: http://arxiv.org/pdf/2005.13228
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    References listed on IDEAS

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    1. Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 31, pages 1967-2072, Elsevier.
    2. A. Michael Spence, 1977. "Entry, Capacity, Investment and Oligopolistic Pricing," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 534-544, Autumn.
    3. Joseph Farrell & Carl Shapiro, 1988. "Dynamic Competition with Switching Costs," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 123-137, Spring.
    4. Paul Klemperer, 1987. "The Competitiveness of Markets with Switching Costs," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 138-150, Spring.
    5. Cabral, Luis M B & Riordan, Michael H, 1994. "The Learning Curve, Market Dominance, and Predatory Pricing," Econometrica, Econometric Society, vol. 62(5), pages 1115-1140, September.
    6. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    7. Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, Elsevier.
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