Oligopoly simulates market economics within an industry. Participants make output decisions based on varying degrees of information visibility and communication between the industry members. Industry output and profitability varies as a consequence and across repeated cycles, the Nash Equilibrium is usually reached, confirming the theory in practice - much to many participants' surprise.
What Makes Oliogopoly so
Effective for Business Education?
Oligopoly brings economic game theory to tangible life. It demonstrates the "Nash Equilibrium" under circumstances in which no player can benefit by changing their strategy while the other players keep their strategies unchanged
Learning Objectives
At the end of the lecture and having run the model, participants should:
- Understand that economic game theory plays out in reality
- Comprehend the circumstances when, implications of, and reasons why the Nash Equilibrium applies
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