Oligopoly: An interdependent group exercise

My students were able to grasp the basics of oligopoly using this introductory, collaborative activity which covers content including:

-characteristics of oligopoly

-game theory, dominant strategy, Nash equilibrium, and collusion

-collusive oligopoly and government intervention

Students work in small groups to complete one part of a shared exploration of the oligopoly. Two groups are different airlines flying from New York to Los Angeles, the third group is the government, while the fourth group is consumers who like to travel. After completing handouts (which also review topics like elasticities and externalities), the groups collaborate to discuss the characteristics of the air travel including the interdependence of their decisions using game theory, the effects of collusion, and potential government intervention to prevent collusion.