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Learning in Cournot Oligopoly--An Experiment

Author

Listed:
  • Huck, Steffen
  • Normann, Hans-Theo
  • Oechssler, Jorg

Abstract

This experiment was designed to test various learning theories in the context of a Cournot oligopoly. The authors derive theoretical predictions for the learning theories and test these predictions by varying the information given to subjects. The results show that some subjects imitate successful behavior if they have the necessary information and, if they imitate, markets are more competitive. Other subjects follow a best reply process. On the aggregate level, the authors find that more information about demand and cost conditions yields less competitive behavior, while more information about the quantities and profits of other firms yields more competitive behavior.

Suggested Citation

  • Huck, Steffen & Normann, Hans-Theo & Oechssler, Jorg, 1999. "Learning in Cournot Oligopoly--An Experiment," Economic Journal, Royal Economic Society, vol. 109(454), pages 80-95, March.
  • Handle: RePEc:ecj:econjl:v:109:y:1999:i:454:p:c80-95
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    References listed on IDEAS

    as
    1. R. D. Theocharis, 1960. "On the Stability of the Cournot Solution on the Oligopoly Problem," Review of Economic Studies, Oxford University Press, vol. 27(2), pages 133-134.
    2. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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