The conjectural variations (CV) approach to oligopoly equilibrium represents a way of unifying the many disparate models of oligopoly behaviour and suppliers’ underlying beliefs about the nature of rivalry which are possible. In this chapter we will first outline the conventional, static CV framework for a homogeneous goods market, where firms regard output choices as their strategic variable. Within this framework, we argue that it is possible to accommodate all the popular static models of oligopoly behaviour, including the Cournot, Stackelberg, and the collusive or market-sharing models. We then consider situations where firms consider price as their decision variable with differentiated products. These include Chamberlin’s and Sweezy-Stigler’s kinked demand curve models.
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