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An experimental test of the mixed strategy equilibrium in price-quantity oligopolies

Author

Listed:
  • Daniel Cracau

    () (University of Magdeburg, Faculty of Economics and Management, Chair in E-Business)

  • Benjamin Franz

    () (University of Oxford)

Abstract

We experimentally study price-quantity competitions in duopoly and triopoly markets and compare the results with the respective mixed strategy equilibria. The equilibrium does not predict experimental outcomes adequately, but we find indications for a reactive strategy in the experiments.

Suggested Citation

  • Daniel Cracau & Benjamin Franz, 2014. "An experimental test of the mixed strategy equilibrium in price-quantity oligopolies," Economics Bulletin, AccessEcon, vol. 34(3), pages 1369-1380.
  • Handle: RePEc:ebl:ecbull:eb-14-00393
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I3-P126.pdf
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    References listed on IDEAS

    as
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    8. Abbink, Klaus & Brandts, Jordi, 2008. "24. Pricing in Bertrand competition with increasing marginal costs," Games and Economic Behavior, Elsevier, vol. 63(1), pages 1-31, May.
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    Cited by:

    1. Jacobs Martin, 2016. "Number of Firms, Rationing, Matching, and Knowledge: A Comprehensive Study of Variations in Experimental Kreps–Scheinkman Markets," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(3), pages 1273-1319, September.

    More about this item

    Keywords

    Price-Quantity Competition; Mixed Strategy Equilibrium; Experimental Economics;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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