Games Theory and Oligopoly Cover Image

Teoria jocurilor şi oligopolul
Games Theory and Oligopoly

Author(s): Maria Liana Lăcătuş
Subject(s): Cultural Essay, Political Essay, Societal Essay
Published by: EDITURA ASE
Keywords: Games Theory; prisoner dilemma; oligopoly; Nash equilibrium

Summary/Abstract: The Games Theory is focused on strategy issues that imply interdependences between participants' decisions and actions. In particular, this theory deals with situations in which one's gains depend on another’s decisions and actions, so that each person involved has to identify the best reaction to possible actions of all the others. The Games Theory has been applied to understand and explain the behavior of an oligopoly firm. One of the most well known activities is the Prisoner dilemma. Two prisoners are asked to recognize the crimes they committed in a specific period of time. The prisoners are separated and cannot communicate with each other. Each of them has to make a decision by himself, but the decision he will make depends on the other's decision that affects him a lot. The prisoner dilemma model is used to explain the decisions that two competitive firms have to make regarding their spending for advertising.

  • Issue Year: 2008
  • Issue No: 1
  • Page Range: 34-38
  • Page Count: 5
  • Language: Romanian