What This Document Is
This document represents the lecture notes from the second session of Introduction to Economics (ECON 1) at the University of California, Berkeley, taught by Professor Joseph Farrell in Spring 2006. It delves into the complexities of oligopolistic market structures, building upon foundational economic principles. This material is designed to expand understanding beyond perfect competition and monopoly, exploring scenarios with a limited number of firms.
Why This Document Matters
Students enrolled in introductory economics courses, particularly those focusing on microeconomics and industrial organization, will find these notes exceptionally valuable. It’s best utilized during and after lectures to reinforce concepts, prepare for discussions, and build a strong foundation for more advanced economic modeling. Individuals seeking a deeper understanding of real-world market dynamics, where firms strategically interact, will also benefit from exploring the ideas presented.
Topics Covered
* Cournot Oligopoly Model – revisiting core principles and applications.
* Concentration Measures in Oligopolies – analyzing industry structure and profitability.
* Alternative Oligopoly Models – exploring different assumptions about firm behavior.
* Bertrand Competition – examining price competition between firms.
* Stackelberg Model – investigating first-mover advantages in strategic interactions.
* Differentiated Products – understanding how product characteristics impact competition.
* Models of Product Differentiation – exploring spatial and consumer preference approaches.
* Hotelling’s Model – a specific model of location and competition.
What This Document Provides
* A review of the Cournot model and its underlying assumptions.
* Discussion of how market concentration impacts firm performance.
* An overview of various approaches to modeling oligopolistic competition.
* Exploration of static game-theoretic models in price and quantity competition.
* Introduction to the concept of conjectural variations and their role in oligopoly analysis.
* Frameworks for analyzing competition with differentiated products.
* Guidance for further reading and study, referencing specific chapter sections.
