An in-class price competition is discussed and analyzed. Students are distributed into five firms that choose their prices in a framework in which they know the demand and cost conditions facing them and their rivals. Students learn about trying to maximize profit in an oligopolistic environment with differentiated products. The game, and subsequent discussion and analysis can be used for reference when covering standard theoretical principles of price competition. Furthermore, the instructor can use insights from the game to help illustrate pricing practices seen in real industry.
J. Patrick Meister. "An In-Class Pricing Game." Proceedings of the New York State Economics Association. vol. 2, October 2009, p. 112-119
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