conjectural variation

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A model of an oligopoly in which each firm forms expectations about their rival's reaction (or variation) to this firm's potential change in action. Various standard models, such as Cournot, Bertrand, and Stackelberg oligopolies, as well as competition and joint profit maximization, can be derived as particular cases from the first-order conditions of the conjectural variation model for certain values of the parameters.

Subjects: Economics.

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