Oligopoly

From Hobson's Choice

A market in which there are only a small number of sellers. As with monopoly, sellers in an oligopoly face a downward-sloping demand curve; as an oligopolist increases output, the price of the good will decline. (In a genuinely competitive market, this is not the case; no single seller can influence the price of the good).

However, two major attributes distinguish an oligopolist from a monopolist: first, when market control is concentrated among a small number of participants, strategic considerations arise. A decision to break ranks and increase production to win market share can impose much greater risks than with a monopoly. Second, the shape of the demand curve faced by the oligopolist may have take many different shapes, depending on the market structure.

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External Links

Jaap H. Abbring & Jeffrey R. Campbell, "Duopoly Dynamics with a Barrier to Entry" , Federal Reserve Bank of Chicago (2007)
Jaap H. Abbring & Jeffrey R. Campbell, "Last-In First-Out Oligopoly Dynamics" , Federal Reserve Bank of Chicago (2006)
Subhayu Bandyopadhyay & Howard J. Wall, "Oligopoly and Outsourcing" , Research Division, St. Louis Federal Reserve Bank (2005)
Alan Barkema, Mark Drabenstott, & Nancy Novack, "The New U.S. Meat Industry" , Kansas City Federal Reserve (2nd Qtr, 2001)
Duncan Foley, Economic Reasoning, §11: "Price setting: The case of oligopoly" , New School University, NY (date unknown)
Steve Hannaford, Oligopoly Watch (web log)