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Game Theory and Industrial Organization

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  • Kyle Bagwell
  • Asher Wolinsky

Abstract

In this article, we consider how important developments in game theory have contributed to the theory of industrial organization. Our goal is not to survey the theory of industrial organization; rather, we consider the contribution of game theory through a careful discussion of a small number of topics within the industrial organization field. We also identify some points in which developments in the theory of industrial organization have contributed to game theory. The topics that we consider are: commitment in two-stage games and the associated theories of strategic-trade policy and entry deterrence; asymmetric-information games and the associated theories of limit pricing and predation; repeated games with public moves and the associated theory of collusion in markets with public demand fluctuations; mixed-strategy equilibria and purification theory and the associated theory of sales; and repeated games with imperfect monitoring and the associated theory of collusion and price wars. We conclude with a general assessment concerning the contribution of game theory to industrial organization.
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  • Kyle Bagwell & Asher Wolinsky, 2000. "Game Theory and Industrial Organization," Discussion Papers 1307, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  • Handle: RePEc:nwu:cmsems:1307
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    2. Hubert Kempf & Grégoire Rota Graziosi, 2010. "Leadership in Public Good Provision: A Timing Game Perspective," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 763-787, August.
    3. Valentiny, Pál, 2019. "Közgazdaságtan a jogalkalmazásban [Forensic economics]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 134-162.
    4. Corchon, Luis & Marini, Marco A., 2017. "Handbook of Game Theory and Industrial Organization, Volume I: Theory. An Introduction," MPRA Paper 81443, University Library of Munich, Germany.
    5. W. Bentley MacLeod, 2006. "Reputations, Relationships and the Enforcement of Incomplete Contracts," CESifo Working Paper Series 1730, CESifo.
    6. Christiansen, Arndt, 2006. "The "more economic approach" in EU merger control: A critical assessment," Research Notes 21e, Deutsche Bank Research.
    7. Joseph E. Harrington Jr. & Andrzej Skrzypacz, 2007. "Collusion under monitoring of sales," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 314-331, June.
    8. Bagwell Kyle & Lee Gea M, 2010. "Advertising Competition in Retail Markets," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, August.
    9. Topolyan, Iryna, 2017. "Price competition when three are few and four are many," International Journal of Industrial Organization, Elsevier, vol. 54(C), pages 175-191.
    10. Ed Hopkins & Tatiana Kornienko, 2007. "Cross and Double Cross: Comparative Statics in First Price Auctions," Levine's Bibliography 321307000000000831, UCLA Department of Economics.
    11. Weber, Thomas A., 2014. "A continuum of commitment," Economics Letters, Elsevier, vol. 124(1), pages 67-73.
    12. Riccardo Martina, 2013. "Una nota su incentivi manageriali e altruismo in oligopolio," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2013(110), pages 105-114.
    13. Grégoire Rota-Graziosi & Hubert Kempf, 2011. "Leadership in Public Good Provision: a Timing Game Perspective," CERDI Working papers halshs-00556944, HAL.
    14. Marini, Marco A. & Corchon, Luis, 2016. "Handbook of Game Theory and Industrial Organization: An Introduction," MPRA Paper 77169, University Library of Munich, Germany.
    15. Ed Hopkins & Tatiana Kornienko, 2004. "Non-Monotone Comparative Statics in Games of Incomplete Information," Edinburgh School of Economics Discussion Paper Series 122, Edinburgh School of Economics, University of Edinburgh.
    16. Jullien, Bruno & Lefouili, Yassine & Riordan, Michael, 2018. "Privacy Protection, Security, and Consumer Retention," TSE Working Papers 18-947, Toulouse School of Economics (TSE), revised Jun 2020.
    17. Christiansen, Arndt, 2005. "Der "more economic approach" in der EU-Fusionskontrolle - eine kritische Würdigung," Research Notes 21, Deutsche Bank Research.

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