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Conjectural variation


A model of an oligopoly in which each firm forms expectations about their rival’s reaction (or variation) to a 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 for profit maximization of the conjectural variation model for certain values of the parameters.


Reference: Oxford Press Dictonary of Economics, 5th edt.