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Cournot Competition: The Scooter Market

Module Overview and Objectives

This module takes between 30 and 35 minutes. It assumes students have been introduced to equilibrium in perfectly competitive markets and profit-maximizing pricing under monopoly. It has the following learning objectives:

The Game: A Brief Summary

MobLab divides students into N-player markets, with varying across the activities, and students act as firms in a Cournot oligolopoly, simultaneously choosing their level of production of a homogeneous good (scooters).  The market price is determined by a linear demand curve with intercept 30 and slope equal to -1, or P = 30-Q, where Q is the the total quantity chosen by all firms. Marginal cost for all firms is zero At the end of round, each firm learns the total market production and the resulting price and profits. 

Students play three versions of this game, progressing from monopoly (N=1), to duopoly (N=2), and finally a larger, more competitve market (N=14). Students play up to three rounds of each type of game, which allows them to develop their strategy and calibrate their beliefs about the aggregate production of other firms in the market.

Module Procedures in Brief


Detailed Procedures