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Endogenous Timing in Duopoly : Experimental Evidence

Author

Listed:
  • Fonseca, M.A.
  • Müller, W.

    (Tilburg University, Center For Economic Research)

  • Normann, H.T.

Abstract

In this paper we experimentally investigate the extended game with observable delay of Hamilton and Slutsky (Games Econ.Beh., 1990).Firms bindingly announce a production period (one out of two periods) and then they produce in the announced sequence.Theory predicts simultaneous production in period one but we find that a substantial proportion of subjects choose the second period.
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Suggested Citation

  • Fonseca, M.A. & Müller, W. & Normann, H.T., 2005. "Endogenous Timing in Duopoly : Experimental Evidence," Discussion Paper 2005-77, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:ddc44fc6-8a7a-4320-bfb2-b30cb8be0822
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    References listed on IDEAS

    as
    1. Saloner, Garth, 1987. "Cournot duopoly with two production periods," Journal of Economic Theory, Elsevier, vol. 42(1), pages 183-187, June.
    2. Huck, Steffen & Muller, Wieland & Normann, Hans-Theo, 2002. "To Commit or Not to Commit: Endogenous Timing in Experimental Duopoly Markets," Games and Economic Behavior, Elsevier, vol. 38(2), pages 240-264, February.
    3. van Damme, Eric & Hurkens, Sjaak, 2004. "Endogenous price leadership," Games and Economic Behavior, Elsevier, vol. 47(2), pages 404-420, May.
    4. van Damme, Eric & Hurkens, Sjaak, 1999. "Endogenous Stackelberg Leadership," Games and Economic Behavior, Elsevier, vol. 28(1), pages 105-129, July.
    5. Robson, Arthur J, 1990. "Stackelberg and Marshall," American Economic Review, American Economic Association, vol. 80(1), pages 69-82, March.
    6. Huck, Steffen & Muller, Wieland & Normann, Hans-Theo, 2001. "Stackelberg Beats Cournot: On Collusion and Efficiency in Experimental Markets," Economic Journal, Royal Economic Society, vol. 111(474), pages 749-765, October.
    7. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    8. Holt, Charles A, 1985. "An Experimental Test of the Consistent-Conjectures Hypothesis," American Economic Review, American Economic Association, vol. 75(3), pages 314-325, June.
    9. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
    10. Santos-Pinto, Luís, 2008. "Making sense of the experimental evidence on endogenous timing in duopoly markets," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 657-666, December.
    11. van Damme, Eric & Hurkens, Sjaak, 1999. "Endogenous Stackelberg Leadership," Games and Economic Behavior, Elsevier, vol. 28(1), pages 105-129, July.
    12. Amir, Rabah & Grilo, Isabel, 1999. "Stackelberg versus Cournot Equilibrium," Games and Economic Behavior, Elsevier, vol. 26(1), pages 1-21, January.
    13. Ellingsen, Tore, 1995. "On flexibility in oligopoly," Economics Letters, Elsevier, vol. 48(1), pages 83-89, April.
    14. Miguel Fonseca & Steffen Huck & Hans-Theo Normann, 2005. "Playing Cournot although they shouldn’t," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(3), pages 669-677, April.
    15. Normann, Hans-Theo, 2002. "Endogenous Timing with Incomplete Information and with Observable Delay," Games and Economic Behavior, Elsevier, vol. 39(2), pages 282-291, May.
    16. Toshihiro Matsumura, 2002. "Market Instability in a Stackelberg Duopoly," Journal of Economics, Springer, vol. 75(3), pages 199-210, April.
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    More about this item

    Keywords

    Commitment; Endogenous timing; Experimental economics; Cournot; Stackel- berg;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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