Abstract
In the context of oligopoly, firms do not have to worry about strategic behaviour as do monopolies, as far as consumers are concerned. Nonetheless, as they face competition from a few other firms, strategies in terms of price-setting and quantity-setting are of prime importance. What we want to look at in this essay is the range of the different strategies a duopolistic firm (i.e. an oligopoly that faces only one competitor) might choose, in a non-cooperative quantity-setting context. We want to introduce the concept of conjectural variations in that analysis, as it helps understanding the divergence between the two main models of duopolistic quantity-setting, Cournot and Stackelberg. By doing so, we will be able to compare these two approaches to duopolistic profit-maximizing firms and to determine why firms should adopt one strategy or the other.
