S/E/64. Oligopoly and Entry Conditions

This essay looks as some of the broad problems faced by theories of oligopoly, and the various models of oligopoly that have been suggested. It then looks at various suggested models of entry conditions, and argues that a simple limit pricing theory, where pricing decisions are explicitly made to prevent entry, is untenable. Finally, it looks at contestability theory, noting that if we include exit conditions into our calculations of entry conditions then entry conditions could be said to reduce market power and force firms to price competitively.