On the profitability of collusion in location games
AbstractOn the basis of a real high stakes insurance experiment with small probabilities of losses, we demonstrate that concern is a more important driver of WTP for insurance than subjective probability estimates when there is ambiguity surrounding the estimate. Concern is still important when probabilities are exactly given. It also helps explaining the low probability insurance puzzle well known from the literature, where a part of individuals pays too much and a part nothing for coverage, a result we are able to replicate. In our experiment, belonging to either the group of threshold persons or to those that pay far too much, is not related to probability judgments but to the degree an individual is concerned in our decision situation. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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 2000,23.
Date of creation: 2000
Date of revision:
Other versions of this item:
- Huck, Steffen & Knoblauch, Vicki & Muller, Wieland, 2003. "On the profitability of collusion in location games," Journal of Urban Economics, Elsevier, vol. 54(3), pages 499-510, November.
- Huck, Steffen & Knoblauch, Vicki & Müller, Wieland, 2002. "On the profitability of collusion in location games," Discussion Papers, Research Unit: Market Processes and Governance FS IV 02-22, Social Science Research Center Berlin (WZB).
- Huck, S. & Knoblauch, V. & Müller, W., 2003. "On the profitability of collusion in location games," Open Access publications from Tilburg University urn:nbn:nl:ui:12-123126, Tilburg University.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Knoblauch, Vicki, 2002. "An Easy Proof That a Square Lattice Is an Equilibrium for Spatial Competition in the Plane," Journal of Urban Economics, Elsevier, vol. 51(1), pages 46-53, January.
- Eaton, B Curtis & Lipsey, Richard G, 1975.
"The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition,"
Review of Economic Studies,
Wiley Blackwell, vol. 42(1), pages 27-49, January.
- B.Curtis Eaton & Richard G. Lipsey, 1972. "The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition," Working Papers 87, Queen's University, Department of Economics.
- Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 1-26, January.
- A Okabe & A Suzuki, 1987. "Stability of spatial competition for a large number of firms on a bounded two-dimensional space," Environment and Planning A, Pion Ltd, London, vol. 19(8), pages 1067-1082, August.
- Aoyagi, Masaki & Okabe, Atsuyuki, 1993. "Spatial competition of firms in a two-dimensional bounded market," Regional Science and Urban Economics, Elsevier, vol. 23(2), pages 259-289, April.
- Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, II: Applications," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 27-41, January.
- Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May.
- Simon, Leo K, 1987. "Games with Discontinuous Payoffs," Review of Economic Studies, Wiley Blackwell, vol. 54(4), pages 569-97, October.
- Steffen Huck & Kai A. Konrad & Wieland Müller, 2005.
"Merger without Cost Advantages,"
CESifo Working Paper Series
1461, CESifo Group Munich.
- Daniel Strobach, 2006. "Competition between airports with an application to the state of Baden-Württemberg," Diskussionspapiere aus dem Institut fÃ¼r Volkswirtschaftslehre der UniversitÃ¤t Hohenheim 272/2006, Department of Economics, University of Hohenheim, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.