comparative analysis of three oligopoly models

This thesis examines as well as compares three oligopoly models. In Seade (1980), the effect of entry on outputs and profits is analyzed. Firms may respond to entry in a perverse way by increasing their outputs. The equilibrium price set by firms always rests above marginal costs. In Perloff and Salop (1985), the focus is on the effect of both limited and unlimited entry on oligopoly pricing behavior. Firms may set their equilibrium price equal to marginal cost; therefore, an oligopoly may behave like a perfectly competitive industry. Salop (1979) offers a spatial model of oligopoly. The measure of the degree of monopolistic competition differs from that of Perloff and Salop (1985). The response of firms to changes in both demand and costs also differs between Salop (1979), and Perloff and Salop (1985).