Title: Oligopoly Behavior
Authors: Lisa Giddings and John Nunley, University of Wisconsin-La Crosse
Contact: firstname.lastname@example.org, Jnunley@uwlax.edu
Submission Date: January 2016
Course Name: ECO308, Intermediate Microeconomic Theory
Course Description: ECO308 is a theory course on microeconomics. It is usually offered in conjunction with Intermediate Macroeconomic Theory and is a requirement for the economics major, usually taken by juniors and seniors. The course is difficult for students, requiring a good knowledge of and ability to use algebra and calculus. The course is offered twice per year through our department to 30-35 students each semester.
Why We Chose the Topic
To our knowledge there has never been a lesson study on any topic in ECO308. We chose to study the section on oligopoly because it is both difficult and important. It is a new concept for students in the sense that this is the first time they are exposed to firms or agents interacting strategically rather than acting alone and in one’s own best interest. The topic requires an introduction to game theory and does not follow from what students have learned about perfectly competitive firms or even monopolies who do not have to consider other firms in their decisions. Having said this, the topic is extremely important for intermediate students to become acquainted. Oligopolies exist, and strategic thinking is common rather than rare. Instructors tend to get to this part of the material toward the end of the class, and the information embodies many of the concepts that have been presented thus far, so it can be somewhat of a capstone topic for students in the course. The topic requires at least two one-hour and 25-minute class periods, if not three to do it justice. Our lesson study project is covering the topic of Oligopoly and because the course is only taught in one section each semester, we will be studying this topic over the course of two semesters. The first study took place during the spring of 2015. Dr. John Nunley was teaching the course that semester and Dr. Lisa Giddings observed one lesson on 28 April 2015.
Abstract: Through the study of oligopolies, our learning objective is to improve stoduent ability to compare and contrast the different models that economists use to explain oligopoly behavior and to be able to recognize where these models are applicable in the real world. These goals follow the broad learning goals of the Department of Economics that include improving critical thinking, and having students be able to apply economic models to the real world. We developed a lesson plan which included pre and post-assessments and participation in active learning in groups through problem solving. We found after one test of the lesson and one observation that students had a hard time connecting the oligopoly market structure to the other market structures they had learned in class already (perfect competition and monopoly) at least mathematically. As such, they were unable to evaluate the outcomes of the various market structures from a consumer’s perspective. Students got bogged down in learning the mathematics of oligopoly and were subsequently unable to apply what they learned to the real world.