Oligopoly & Game Theory explained | Economics 100 - Cheat Sheet - YouTube
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When a market has just a few powerful players, every pricing decision becomes a chess match — and Game Theory explains exactly why rivals can't stop second-guessing each other.
Game TheoryNash EquilibriumPrisoner's DilemmaOligopoly Theory
Theory Briefing
- Oligopolies feature only a handful of dominant firms, meaning each company's profits depend directly on what its rivals decide to do.
- Game Theory's Nash Equilibrium shows why oligopolists often get stuck in mutually harmful outcomes, like price wars, even when cooperation would benefit everyone.
- The Prisoner's Dilemma captures why firms in an oligopoly struggle to collude — self-interest drives each player to defect, even against their own collective gain.