Does information about competitors' actions increase or decrease competition in experimental oligopoly markets?
AbstractThis paper investigates the impact of information about rivals' actions on the competitiveness of experimental oligopoly markets. We compare two treatments: in one, firms are informed about their rivals' actions and profits. In the other, firms are only given some aggregate information about their rivals' actions (aggregate quantities, average price). We find that in markets where goods are strategic substitutes (Cournot) the first, full information treatment leads to a significantly higher degree of competition. This is in contrast to conventional wisdom in IO. However, in markets with strategic complements (Bertrand), we find no significant difference between the two treatments.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Industrial Organization.
Volume (Year): 18 (2000)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/inca/505551
Other versions of this item:
- Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 1998. "Does information about competitors' actions increase or decrease competition in experimental oligopoly markets?," Industrial Organization 9803004, EconWPA.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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