Chapter 49 Game theory and industrial organization

Kyle Bagwell*, Asher Wolinsky

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapter

13 Scopus citations

Abstract

In this article, we consider how important developments in game theory have contributed to the theory of industrial organization. Our goal is not to survey the theory of industrial organization; rather, we consider the contribution of game theory through a careful discussion of a small number of topics within the industrial organization field. We also identify some points in which developments in the theory of industrial organization have contributed to game theory. The topics that we consider are: commitment in two-stage games and the associated theories of strategic-trade policy and entry deterrence; asymmetric-information games and the associated theories of limit pricing and predation; repeated games with public moves and the associated theory of collusion in markets with public demand fluctuations; mixed-strategy equilibria and purification theory and the associated theory of sales; and repeated games with imperfect monitoring and the associated theory of collusion and price wars. We conclude with a general assessment concerning the contribution of game theory to industrial organization.

Original languageEnglish (US)
Title of host publicationHandbook of Game Theory with Economic Applications
EditorsRobert Aumann, Sergiu Hart
Pages1851-1895
Number of pages45
DOIs
StatePublished - 2002

Publication series

NameHandbook of Game Theory with Economic Applications
Volume3
ISSN (Print)1574-0005

Keywords

  • collusion
  • entry deterrence
  • game theory
  • industrial organization
  • limit pricing
  • predation
  • sales
  • strategic trade

ASJC Scopus subject areas

  • Statistics and Probability
  • Economics and Econometrics
  • Statistics, Probability and Uncertainty
  • Applied Mathematics

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