Module Identifier  EC30110  
Module Title  OLIGOPOLY AND INTRODUCTION TO GAME THEORY  
Academic Year  2003/2004  
Coordinator  Professor John R Cable  
Semester  Semester 1  
PreRequisite  EC30230  
Mutually Exclusive  EC36420  
Course delivery  Seminars / Tutorials  4 Hours  
Lecture  10 Hours  
Assessment 

Oligopolistic interdependence
Incidence of oligopoly
Modelling problems
Game theory: history and method
Reading:
Nasar, Chs 613
Gibbons, Preface
Lyons and Varoufakis, pp.7983
Dixon, pp.127128
2. A normal form game: the Prisoners' Dilemma
Description of normal form games
The Prisoners' Dilemma game
Strategic dominance as solution concept
Reading:
Gibbons, Ch 1, pp.18
3. Nash Equilibrium and Static Oligopoly Models
Nash Equilibrium
Cournot oligopoly
Bertrand oligopoly
Welfare comparisons
Reading:
Gibbons, Ch 1, pp.822
Lyons and Varoufakis, pp.8488
Dixon, pp.128136
4. Dynamic Games and Leader ? Follower Behaviour
Description of dynamic games
Extensive form: 'game trees'
Backwards induction
Stackelberg equilibrium
Welfare comparisons
Reading:
Gibbons, Ch 2, pp.5564
Dixon, pp.128136
5. Perfect Equilibrium and Market Entry in Dynamic Games
The two stage entry game
Perfect equilibrium
Entry deterrence: the role of commitment and reputation
Reading:
Gibbons, Ch 2, pp.7173
Lyons and Varoufakis, pp.8891
Dixon, pp.145155
6. Repeated Games
Cooperative Behaviour
Finitely repeated games
The chainstore paradox and twoperiod Prisoners' Dilemma
Infinitely repeated games
Cooperation in the Prisoners' Dilemma
Collusion amongst oligopolists: cartels and tacit collusion
Welfare comparisons
Reading:
Gibbons, Ch 2, pp.82107
Lyons and Varoufakis, pp.99106
Dixon, pp.155161
This module is at CQFW Level 6