Game theory is applicable to oligopoly behaviour because oligopolists
A) use strategic behaviour.
B) ignore rival firms.
C) can only be profitable if they collude.
D) are price takers.

Question

Quizplus · Accepted Answer

Game theory is applicable to oligopoly behavior because oligopolists use strategic behavior, considering the actions and reactions of other firms in the market when making decisions. This strategic interdependence is a key feature of oligopolies and is well analyzed through game theory.

Game Theory Is Applicable to Oligopoly Behaviour Because Oligopolists