By constructing games to describe situations in which oligopolies find themselves we hope to "solve" the game. That is, we hope to be able to describe or predict how a firm whose primary motivation is profit would behave in a given circumstance. It turns out that different settings (different games) require different solution methods.
In the games we investigate there will be two firms, not because oligopolies are typically made up of two firms but because it is simple to express such industries with payoff matrices or game trees and the strategic issues are the same in a two firm industry (sometimes called a duopoly) or one with more than two firms.
We begin our study of solution methods with those games in which one or both players has a dominant strategy. Simply put, a dominant strategy is a strategy that is always best, no matter what the other player chooses to do.
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