A Model of Oligopoly

Abstract

This article develops a simple linear model of oligopoly and uses it to provide a detailed characterization of equilibrium prices, quantities, mark-ups, price elasticities of market demand; and welfare, all in terms of the parameters of the model. This is done under five different conjectures: Collusion, Threat, Cournot, Stackelberg, and Bertrand. The results of the model are used for comparative statics.