Ronald Harstad (Rutgers University) Stephen Martin (Institute of Economics, University of Copenhagen) Hans-Theo Normann (Humboldt Universität zu Berlin)
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The purpose of this research is to examine, in experimental oligopoly markets, (a) whether parallel pricing patterns emerge when communication among players is limited to cheap talk announcements; (b) whether such pricing patterns, if they emerge, lead to payoffs that exceed those players would receive in Nash equilibrium of the one-shot game. Results indicate that announcements and price matching lead to margins that exceed those of static Nash equilibrium, while falling short of joint profit maximization.
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Paper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number
1997-07.
Length: 37 pages Date of creation: Mar 1997 Date of revision: Publication status: Published in: Louis Phlips (ed.): Applied Industrial Economics, Cambridge University Press, 1998, 123-151 Handle: RePEc:kud:kuieci:1997-07
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