Game Theory and Oligopoly: Crash Course Economics Video Analysis with Key- This is a 10 page document that contains a video analysis assignment and a completed teachers key for easy marking. It contains 30 questions based on The Crash Course Economics video:Game Theory and Oligopoly
This assignment will ask students to go to YouTube and watch the Crash Course video: Game Theory and Oligopoly. The video will first introduce students to the four types of markets: a perfect competition market, a monopoly, monopolistic competition, and an oligopoly. Monopolistic competition (similar products and low barriers for entry, ie fast food) and oligopoly (similar products and high barriers for entry, ie cell phones) are compared and contrasted. Competition between companies in an oligopoly is explained using non-price competition. Advertising, location, customer service, and brand appeal are all explained as non-price competition and how companies in an oligopoly use these factors to gain an advantage. Game theory is the next concept which is reviewed. Students will learn if people or companies rationally follow their own self-interests, the best outcome is hard to reach when they can’t or don’t cooperate. For example, similar stores opening up next to each other to draw the customers from each other. Companies which do understand game theory are highlighted and how they work to gain an advantage without manipulating prices. Following game theory, the video moves on to the negative side of oligopoly- the formation of cartels and collusion- which is illegal in the US. OPEC is used as an example for a cartel. The video concludes by looking at price leadership, a from of pricing in oligopolies which isn't illegal but is in a grey area (airlines raising prices for checked bags and other following suit). The video concludes by explaining why cartels are often unstable and what happens to companies in oligopolies which can't adapt (Pan Am, Atari).
This video analysis can be easily used as an introduction to the topic, a study guide, or a quick and easy sub plan. Students love the independence of this assignment by getting to use laptops, Chromebooks, or even their own cellphones to watch the video. Crash Course videos tend to move fast so students often find success if they watch the video through once before going back to pause/play to find the answers to all of the questions.