Models of oligopoly behaviour, whether the respective assumptions are realistic and examples where different models might be the most appropriate.

In this essay I am going to discuss models of oligopoly behaviour and analyse them and see whether they are realistic or not and evaluate them with certain examples where they may be most suitable. An oligopoly is a market which consists of few firms which sell similar or homogenous products. In this essay I will also be looking at a duopoly, which is a market with two firms. The Cournot equilibrium, this is where "…

…to apply because constant price changes are needed. In conclusion all these models of behaviour have been developed well. But the question of whether it is realistic or not questions the suitability of these models. The Cournot equilibrium is the most unrealistic in this sense. The Edgeworth model seems the most realistic out of all the models, because it takes into account profit maximising and the essentialness of price competition to increase demand in oligopolies.