James Friedman provides a thorough survey of oligopoly theory using numerical examples and careful verbal explanations to make the ideas clear and accessible. While the earlier ideas of Cournot, Hotelling, and Chamberlin are presented, the larger part of the book is devoted to the modern work on oligopoly that has resulted from the application of dynamic techniques and game theory to this area of economics. The book begins with static oligopoly theory. Cournot's model and its more recent elaborations are covered in the first substantive chapter. Then the Chamberlinian analysis of product differentiation, spatial competition, and characteristics space is set out. The subsequent chapters on modern work deal with reaction functions, advertising, oligopoly with capital, entry, and oligopoly using noncooperative game theory. A large bibliography is provided.
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adjustment cost advertising expenditures assumed assumptions average total cost capital stock Chapter characteristics concave concave function conjectural variation consumer cooperative cost function Cournot equilibrium Cournot model Cournot reaction functions curve decision variable denoted differentiated products discount parameter discounted cash flow discounted profits discussion dynamic models effect enter entry equation equilib established firm example firm chooses firm's first-order condition fixed cost Friedman game theory given goodwill imagine industry interest inverse demand function investment limit pricing marginal cost market price maximize monopolistic competition multiperiod model Nash equilibrium noncooperative equilibrium noncooperative game number of firms obtain oligopolistic oligopoly models oligopoly theory optimal outcome output levels Pareto optimal payoff function period player preentry price choice price leadership price vector profit function profit possibility frontier rium Section single firm single-period model Stackelberg static steady-state strategy set sumers tion unit utility zero