Stability of the Cournot Process - Experimental Evidence
AbstractWe report results of a series of experiments designed to test the stability of the best reply process. With linear demand and cost functions, the process is stable if and only if there are less than three firms in the market. However, we find no experimental evidence of such instability in a four firm oligopoly. Moreover, there are no differences between a market which theoretically should not converge to Nash equilibrium and one which should converge because of inertia.
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Bibliographic InfoPaper provided by EconWPA in its series Experimental with number 9707002.
Date of creation: 22 Jul 1997
Date of revision:
Note: Pages: 14 ; figures: included
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Other versions of this item:
- Steffen Huck & Hans-Theo Normann & Jörg Oechssler, 2002. "Stability of the Cournot process - experimental evidence," International Journal of Game Theory, Springer, vol. 31(1), pages 123-136.
- Steffen Huck & Hans-Theo Normann & Jörg Oechssler, 2002. "Stability of the Cournot Process - Experimental Evidence," Bonn Econ Discussion Papers bgse1_2002, University of Bonn, Germany.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-10-02 (All new papers)
- NEP-EXP-1998-10-02 (Experimental Economics)
- NEP-GTH-1998-10-02 (Game Theory)
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