Oligopoly Dynamics

TL;DR

This paper summarizes lectures on oligopoly dynamics, covering industrial organization problems like learning, switching costs, and innovation, using analytical and numerical methods to analyze firm strategies in dynamic environments.

Contribution

It provides an overview of analytical and numerical techniques for modeling oligopoly dynamics, including state space analysis and strategy derivation without full model solving.

Findings

Analytical solutions for specific parameter values.

Insights into firm strategies based on value functions.

Combination of analytical and numerical solution methods.

Abstract

The present notes summarise the oligopoly dynamics lectures professor Lu\'is Cabral gave at the Bank of Portugal in September and October 2017. The lectures discuss a set industrial organisation problems in a dynamic environment, namely learning by doing, switching costs, price wars, networks and platforms, and ladder models of innovation. Methodologically, the materials cover analytical solutions of known points (e.g., $\delta = 0$), the discussion of firms' strategies based on intuitions derived directly from their value functions with no model solving, and the combination of analytical and numerical procedures to reach model solutions. State space analysis is done for both continuous and discrete cases. All errors are my own.