14.01SC | Fall 2011 | Undergraduate

Principles of Microeconomics

Unit 5: Monopoly and Oligopoly

Oligopoly I

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Session Overview

We have already learned about the operation of two very different types of markets: perfectly competitive markets and monopolists. However, most markets don’t fall into either category. For example, think of the market for soda - both Pepsi and Coke are major producers, and they dominate the market. This type of market structure is known as an oligopoly, and it is the subject of this lecture.
       Learn about the prisoner’s dilemma in this lecture. Image courtesy of Sheep purple on Flickr.

Keywords: Oligopoly; cartel; game theory; Nash equilibrium; Cournot model; duopoly; non-cooperative competition.

Session Activities


Before watching the lecture video, read the course textbook for an introduction to the material covered in this session:

  • [R&T] Chapter 11, “The World of Imperfect Competition.”
  • [Perloff] Chapter 12, “Pricing and Advertising.” (optional)

Lecture Videos


Further Study

These optional resources are provided for students that wish to explore this topic more fully.

Other OCW and OER Content

14.12 Economic Applications of Game Theory, Fall 2005. MIT OpenCourseWare An in-depth course on game theory.


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Course Info

As Taught In
Fall 2011
Learning Resource Types
Lecture Videos
Recitation Videos
Problem Sets with Solutions
Exams with Solutions
Lecture Notes
Exam Materials
Problem Sets