Stackelberg beats Cournot: On collusion and efficiency in experimental markets
AbstractWe report on an experiment designed to compare Stackelberg and Cournot duopoly markets with quantity competition. For each market we implement both a random matching and fixed-pairs version. Stackelberg markets yield, regardless of the matching scheme, higher outputs than Cournot markets. Under random matching total quantities in Stackelberg markets are higher than predicted by the subgame perfect equilibrium while total quantities in the Cournot markets match the equilibrium prediction. Under fixed pairs aggregate output for both, Cournot and Stackelberg, is lower than under random matching, but there is less collusion on Stackelberg markets and, hence, higher efficiency. --
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Bibliographic InfoPaper provided by Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes in its series SFB 373 Discussion Papers with number 1999,32.
Date of creation: 1999
Date of revision:
Other versions of this item:
- 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 749-65, October.
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