Price vs. quantity in oligopoly games

Price-setting and quantity-setting oligopoly games lead to extremely dierent outcomes in the market. One natural way to address this problem is to formulate a model in which some rms use price while the remaining rms use quantity as their decision variable. We introduce a mixed oligopoly game of this type and determine its equilibria. In addition, we consider an extension of this mixed oligopoly game through which the choice of the decision variables can be endogenized. We prove the emergence of the Cournot game.

Quantity-setting games with a dominant firm

We consider a possible game-theoretic foundation of Forchheimer's model of dominant-firm price leadership based on quantity-setting games with one large firm and many small firms. If the large firm is the exogenously given first mover, we obtain Forchheimer's model. We also investigate whether the large firm can emerge as a first mover of a timing game.